25134
12567
25134
12567
0.25
5208333
P5Y
P5Y
P3Y
P5Y
P5Y
P5Y
P5Y
P5Y
P6Y
P6Y
P5Y
P6Y
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Concentration of Credit Risk</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Financial instruments, which potentially subject us to concentration of credit risk, consist primarily of trade accounts receivable. In the normal course of business, we provide credit terms to our customers. Accordingly, we perform ongoing credit evaluations of our customers and maintain allowances for possible losses which, when realized, have been within the range of management's expectations.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> For the six months ended June 30, 2012 and 2011, we had the same customer that individually constituted 86% and 91%, of our total revenues, respectively. Although the contract for this customer has expired, we continue to provide services on a month to month basis during the time that the customer solicits requests for proposals ("RFP") from competing vendors. We are participating in the RFP process and have submitted our response to the customer.</div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 7 - 2012 Equity Financing and the Debt Restructuring</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> On March 26, 2012, we closed on an equity financing (the "2012 Equity Financing") as well as a restructuring of our outstanding senior convertible indebtedness (the "2012 Debt Restructuring") resulting in complete satisfaction of our senior indebtedness.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We entered in to an Engagement Agreement, dated October 28, 2011, with MDB Capital Group, LLC ("MDB"), pursuant to which MDB agreed to act as the exclusive agent of the Company on a "best efforts" basis with respect to the sale of up to a maximum gross consideration of $6,000,000, subsequently verbally increased to $10,000,000, of the Company's securities, subject to a minimum gross consideration of $3,000,000. The Company agreed to pay to MDB a commission of 10% of the gross offering proceeds received by the Company, to grant to MDB warrants to acquire up to 10% of the shares of our common stock and warrants issued in the financing, and to pay the reasonable costs and expenses of MDB related to the offering.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Pursuant to the Engagement Agreement, we entered into a Securities Purchase Agreement ("SPA") dated March 23, 2012 with select institutional and other accredited investors for the private placement of 27,800,000 units of our securities. The SPA included a purchase price of $0.25 per unit, with each unit consisting of one share of common stock and two forms of Warrant: (1) The "A" Warrant grants the investors the right to purchase an additional share of common stock for each two shares of common stock purchased, for a term of six years and at an exercise price of $0.35 per share; and (2) The "B" Warrant will not be exercisable unless and until the occurrence of a future issuance of stock at less than $0.25 per share, but, in the event of such issuance, grants the investors the right to acquire additional shares at a price of $0.05 to reduce the impact of the dilution caused by such issuance, but in no event shall the number of shares to be issued under the B Warrant cause us to exceed the number of authorized shares of common stock. The shares in excess of our authorized shares that would have been issuable under the B Warrant shall be "net settled" by payment of cash in an amount equal to the number of shares in excess of the authorized common shares multiplied by the closing price of our common stock as of the trading day immediately prior to the applicable date of the exercise of such B Warrant. The B Warrant shall be extinguished upon the earlier of: (a) a subsequent financing of at least $5 million on terms no more favorable than that received by the investors in the 2012 Equity Financing; (b) after the effective date of the registration statement registering securities issued in the Equity Financing if the volume-weighted average closing price of the Company's common stock exceeds $.50 per share for a period of 30 trading days and no Volume Failure (as defined in the B Warrant) (measuring the daily average dollar volume of our Common Stock against a minimum volume of $500,000 per day) exists during such period, and the Company is then current in its public filings; or (c) 78 months.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> Net proceeds from the 2012 Equity Financing, after deducting the commissions and the estimated legal, printing and other costs and expenses related to the financing, were approximately $6.1 million. Coincident to the closing of the 2012 Equity Financing, we also closed on the 2012 Debt Restructuring. In connection therewith, the Company paid $2,750,000 to Castlerigg Master Investment Ltd. ("Castlerigg"), and issued to Castlerigg 2,000,000 shares of common stock in full and complete satisfaction of the senior convertible note and all accrued interest. In consideration of negotiating the 2012 Debt Restructuring, we issued to one of our placement agents 586,164 shares of our common stock and paid them $275,041.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In December 2011, we entered into a loan with 7 accredited individuals and entities under the terms of which we borrowed $1,300,000 to be used as working capital ("Bridge Loan"). The Bridge Loan bears an interest rate of 18% per annum and had a maturity date of February 28, 2012, which was subsequently extended to the earlier of the date nine months from the original maturity date or the date we close on an additional sale of our securities that results in gross proceeds to us of $12 million. In consideration of the Bridge Loan we granted to the holders of the Bridge Loan warrants with a five year term to purchase 357,500 shares of our common stock at an exercise price of $0.65 per share. In consideration of the extension of the maturity date of the Bridge Loan, we granted the holders of the Bridge Loan warrants with a six year term to purchase 247,500 shares of our common stock at an exercise price of $0.35 per share.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> In connection with the 2012 Equity Financing and under the terms of the SPA, two of the above described bridge lenders converted the principal balance of their portion of the bridge loan in the amount of $400,000 to common stock and warrants as part of and on the same terms as the 2012 Equity Financing. In addition, one other entity converted the amount owed by us for equipment purchases in the amount of $500,000 to common stock and warrants as part of and on the same terms as the 2012 Equity Financing. The proceeds from these conversions were treated as funds raised with respect to the financing.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> In connection with the 2012 Equity Financing and under the terms of the SPA, the Company agreed to prepare and file, within 60 days following the issuance of the securities, a registration statement covering the resale of the shares of common stock sold in the financing and the shares of common stock underlying the Warrants. The Company filed the registration statement on April 9, 2012 and it was declared effective on August 1, 2012.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> On April 5, 2012 we secured an additional $154,000 from 1 company and 4 individuals (three of which are members of our Board of Directors) on the same terms and conditions as the investors of the 2012 Equity Financing. As a result of this funding we issued 616,000 shares of our common stock and A warrants totaling 400,400 of which 308,000 were issued to investors and 92,400 were issued to our investment banker.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> All warrants listed below were issued with price protection provisions and were accounted for as derivative liabilities. The A Warrants were valued using the Black Scholes pricing model and the B Warrants were valued using the Geometric Brownian Motion methodology with a risk neutral Monte Carlo approach.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="96%"> <tr> <td valign="bottom" width="40%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="40%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Common</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Shares</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Issued</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Number of</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> A Warrants</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Value of A</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Warrants</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Value of</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> B</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Warrants</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Total</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Warrant</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Value</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="40%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Investors</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">24,816,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">12,408,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,985,280</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">98,263</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,083,543</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="40%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Bridge Loan Conversion</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,600,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">800,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">128,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">6,335</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">134,335</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="40%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Equipment Finance<br /> Conversion</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,000,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,000,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">160,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">7,919</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">167,919</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="40%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Agency</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,262,400</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">681,984</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">33,756</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">729,995</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="40%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">28,416,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">18,470,400</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,955,264</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">146,273</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">3,101,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We recorded an aggregate derivative liability of $3,101,537 as of June 30, 2012, related to the reset feature of the A warrants and the B warrants mentioned above. A derivative valuation gain of $1,659,855 was recorded to reflect the change in value of the aggregate derivative liability from the time the warrants issued. The aggregate derivative liability of $3,101,537 was calculated as follows: (1) $2,955,264 for the reset feature of the A warrants using the Black-Scholes pricing model with the following assumptions: (i) risk free interest rate 0.92%, (ii) expected life (in years) of 5.7; (iii) expected volatility of 84.37%; (iv) expected dividend yield of 0.00%; and (v) stock trading price of $0.25 and (2) $146,273 for the B warrants using the Geometric Brownian Motion methodology with a risk neutral Monte Carlo approach and with the following assumptions: (i) risk free interest rate 0.92%, (ii) expected life (in years) of 5.7; (iii) expected volatility of 84.37%; (iv) maximum percent of B warrants allowed 4.99%, and (v) stock trading price of $0.25.</div> <!--EndFragment--></div> </div>
1.0
0.03
103859
101416
659496
492828
241
96925
86910
178427
0.1
0.08
10000000
3000000
6000000
15000000
10000000
0.1
27800000
0.5
0.5
0.25
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="96%"> <tr> <td valign="bottom" width="40%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="40%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Common</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Shares</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Issued</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Number of</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> A Warrants</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Value of A</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Warrants</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Value of</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> B</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Warrants</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Total</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Warrant</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Value</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="40%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Investors</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">24,816,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">12,408,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,985,280</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">98,263</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,083,543</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="40%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Bridge Loan Conversion</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,600,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">800,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">128,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">6,335</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">134,335</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="40%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Equipment Finance<br /> Conversion</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,000,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,000,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">160,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">7,919</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">167,919</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="40%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Agency</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,262,400</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">681,984</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">33,756</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">729,995</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="40%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">28,416,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">18,470,400</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,955,264</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">146,273</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">3,101,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
12500000
1.2
58907
0.0499
1981
400400
400000
308000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 2 - Reclassifications</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Certain 2011 financial statement amounts have been reclassified to conform to 2012 presentations.</div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 8 - 2010 Equity Financing and the Debt Restructuring</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> On December 24, 2010, we closed on an equity financing (the "Equity Financing") as well as a restructuring of our outstanding convertible indebtedness (the "Debt Restructuring"). The Equity Financing and the Debt Restructuring are described as follows.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We entered into a Placement Agency Agreement, dated December 17, 2010, with Philadelphia Brokerage Corporation ("PBC"), pursuant to which PBC agreed to act as the exclusive agent of the Company on a "best efforts" basis with respect to the sale of up to a maximum gross consideration of $15,000,000 of units of the Company's securities, subject to a minimum gross consideration of $10,000,000. The units consisted of two shares of our common stock and one warrant to purchase a share of our common stock. The Company agreed to pay PBC a commission of 8% of the gross offering proceeds received by the Company, to issue PBC 40,000 shares of its common stock for each $1,000,000 raised, and to pay the reasonable costs and expenses of PBC related to the offering. The Company also agreed to pay PBC a restructuring fee in the amount of approximately $180,000 upon the closing of the Equity Financing and the simultaneous Debt Restructuring.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Pursuant to the Placement Agency Agreement, we entered into Subscription Agreements dated December 23, 2010 with select institutional and other accredited investors for the private placement of 12,500,000 units of our securities. The Subscription Agreements included a purchase price of $1.20 per unit, with each unit consisting of two shares of common stock and one warrant to purchase an additional share of common stock. The warrants have a term of five years and had an exercise price of $1.00 per share which was reset to $0.78 pursuant to the 2012 Equity Financing.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Net proceeds from the Equity Financing, after deducting the commissions and debt restructuring fees payable to PBC and the estimated legal, printing and other costs and expenses related to the financing, were approximately $13.5 million. We used a portion of the net proceeds of the Equity Financing to pay down debt and the remainder is being used for working capital.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> On November 29, 2010, we entered into a bridge loan transaction with three accredited investors pursuant to which we issued unsecured notes in the aggregate principal amount of $1.0 million. Upon the closing of the Equity Financing, the lenders converted the entire principal amount plus accrued interest into the same units offered in the Equity Financing and the proceeds from the bridge loan transaction were treated as funds raised with respect to the financing.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In connection with the Equity Financing and under the terms of the Subscription Agreements, the Company agreed to prepare and file, and did file, within 60 days following the issuance of the securities, a registration statement covering the resale of the shares of common stock sold in the financing and the shares of common stock underlying the warrants. The registration statement was declared effective June 16, 2011 satisfying the obligation contained in the Subscription Agreements.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> On December 24, 2010, we also closed on the Debt Restructuring. In connection therewith, we (i) issued an Amended and Restated Senior Convertible Note in the principal amount of $5.5 million (the "Amended and Restated Note") to Castlerigg Master Investment Ltd. ("Castlerigg"), (ii) paid $2.5 million in cash to Castlerigg, (iii) cancelled warrants previously issued to Castlerigg that were exercisable for a total of 5,208,333 shares of common stock, (iv) issued 800,000 shares of common stock to Castlerigg in satisfaction of an obligation under a prior loan amendment, (v) entered into the Letter Agreement pursuant to which we paid Castlerigg an additional $2.75 million in cash in lieu of the issuance of $3.5 million in stock and warrants as provided in the loan restructuring agreement under which the Amended and Restated Note and other documents were issued (the "Loan Restructuring Agreement"), and (vi) entered into an Investor Rights Agreement with Castlerigg dated December 23, 2010. As a result of the foregoing, Castlerigg forgave approximately $7.2 million of principal and accrued but unpaid interest.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The Amended and Restated Note, dated December 23, 2010, was a senior, unsecured note that matured in three years from the closing and bore interest at an annual rate of 6.25%, payable semi-annually. We paid the first year's interest of $350,434 at the closing. The Amended and Restated Note was convertible into shares of common stock at a conversion price of $1.35 per share, subject to adjustment. The Amended and Restated Note was convertible in whole or in part at any time upon notice by Castlerigg to us. The Amended and Restated Note also contained various restrictions, acceleration provisions and other standard and customary terms and conditions. <font style="DISPLAY: inline">Two of our consolidated subsidiaries guaranteed our obligations under the Amended and Restated Note.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> <font style="DISPLAY: inline">The Investor Rights Agreement</font> provides Castlerigg with certain registration rights with respect to the Company's securities held by Castlerigg. These registration rights include an obligation of the Company to issue additional warrants to Castlerigg if certain registration deadlines or conditions are not satisfied. The agreement also contains full-ratchet anti-dilution price protection provisions in the event the Company issues stock or convertible debt with a purchase price or conversion price less than the conversion price described above.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> During the three months ended March 31, 2011, we issued Castlerigg 400,000 warrants pursuant to a waiver agreement dated March 10, 2011 allowing the issuance of shares and warrants for the conversion of the AR Note Payable without adjusting the conversion price of the Amended and Restated Senior 6.25% Convertible Note. These warrants contain full-ratchet anti-dilution price protection provisions in the event the Company issues stock or convertible debt with a purchase price or conversion price less than the conversion price described above and were accounted for as embedded derivatives and valued on the transaction date using a Black Scholes pricing model. During the three and six months ended June 30 ,2011 the warrant holder exercised these warrants using a cashless provision resulting in the company issuing 372,272 shares of our common stock. A valuation gain of $144,000 was recorded to reflect the change in value of the aggregate derivative from the time of issue to the date of conversion.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In connection with the Debt Restructuring, the Company <font style="DISPLAY: inline">amended the note with the holder of a $1.0 million unsecured convertible note, pursuant to which the maturity date of the note was extended to December 31, 2013. We also issued 150,000 shares and 75,000 warrants to acquire our common stock at $.90 per share to the holder of this note as consideration to extend the term of the note.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> On March 26, 2012, we closed on an equity financing (the "2012 Equity Financing") as well as a restructuring of our outstanding senior convertible indebtedness (the "2012 Debt Restructuring") resulting in complete satisfaction our senior indebtedness.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> A portion of the net proceeds from the 2012 Equity Financing was used to close on the 2012 Debt Restructuring therewith. The Company paid $2,750,000 and issued 2,000,000 shares of common stock valued at $760,000 in satisfaction of the $5,500,000 senior convertible note and $72,570 of accrued interest. In addition, the remaining accrued interest value of $608,066 was satisfied.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Investor warrants totaling 12,499,980 issued under the Placement Agency Agreement contain price protection adjustments in the event we issue new common stock or common stock equivalents in certain transactions at a price less than $1.00 per share and were accounted for as embedded derivatives and valued on the transaction date using a Black Scholes pricing model. Pursuant to the 2012 Equity Financing the exercise price was reset to $0.78 per share.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We recorded an aggregate derivative liability of $750,000 and $6,625,000 as of June 30, 2012 and 2011, respectively, related to the reset feature of the warrants issued under the Placement agency Agreement. A derivative valuation gain of $2,125,000 and $4,125,000, respectively, were recorded to reflect the change in value of the aggregate derivative liability since December 31, 2011 and December 31, 2010, respectively. The aggregate derivative liability of $750,000 for the conversion feature of the note was calculated using the Black-Scholes pricing model with the following assumptions: (i) risk free interest rate 0.49%, (ii) expected life (in years) of 3.5; (iii) expected volatility of 74.05%; (iv) expected dividend yield of 0.00%; and (v) stock trading price of $0.25.</div> <!--EndFragment--></div> </div>
33
410000
0.1
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="60%"> <tr> <td valign="bottom" width="82%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="16%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="82%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 2012</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">96,925</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="82%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 2013</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">178,427</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="82%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 2014</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">86,910</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="82%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 2015</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">241</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="82%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">362,503</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
0.005
0.03
2650000
1.22
P10Y
2
31
1
5
1
15
P3Y
1.11
0.25
0.25
0.25
0.25
0.25
0.25
0.25
3500000
50127218
4470450
586164
800000
135369
222742
1000000
12000000
5000000
0.5
500000
false
--12-31
Q2
2012
2012-06-30
10-Q
0000740726
107227820
Smaller Reporting Company
BROADCAST INTERNATIONAL INC
1252538
2443594
1239903
1219163
96859058
99476870
404000
193585
97420
1786873
240331
120228
61098
1681783
203366
73357
36965
105090
36965
53490
47850
265636
166668
166668
83334
166668
83334
98968
51848
1095309
18836
476234
5075
2538
5076
2538
24070976
4543487
3398640
2465992
2103241
1269579
1184804
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 1 - Basis of Presentation</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 3.6pt; text-align: left; TEXT-INDENT: 0pt"> In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Broadcast International, Inc. ("we" or the "Company") contain the adjustments, all of which are of a normal recurring nature, necessary to present fairly our financial position at December 31, 2011 and June 30, 2012 and the results of operations for the three and six months ended June 30, 2011 and 2012, respectively, with the cash flows for each of the six months ended June 30, 2011 and 2012, in conformity with U.S. generally accepted accounting principles.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 3.6pt; text-align: left; TEXT-INDENT: 0pt"> These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2011. Operating results for the three and six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ended December 31, 2012.</div> <!--EndFragment--></div> </div>
52996
19482
157667
72745
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 10 - Equipment Financing</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> On August 27, 2009, we completed an equipment lease financing transaction with a financial institution. Pursuant to the financing, we entered into various material agreements with the financial institution. These agreements are identified and summarized below.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We entered into a Master Lease Agreement dated as of July 28, 2009 with the financial institution pursuant to which we sold to the financing institution certain telecommunications equipment to be installed at 1,981 (subsequent additional locations have increased the customer's network to an aggregate of approximately 2,100 locations) of our customer's retail locations in exchange for a one time payment of $4,100,670 by the financial institution. We will pay to the financial institution 36 monthly lease payments of approximately $144,000 plus applicable sales taxes. We had the right to terminate the lease after making 33 payments for a termination fee of the higher of approximately 10% of the original equipment value (approximately $410,000) or the then "in-place fair market value" after which payment we would own all of the equipment. We gave timely notice of exercise of this option and are currently in the process of determining by independent appraisal the final purchase price. Although we continue to make the lease payments those payments will be applied to the purchase price. We continue to account for this arrangement as a capital lease pending final resolution of the purchase option.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We also entered into a security agreement with the financial institution pursuant to which we granted a first priority security interest in the equipment, whether now owned or hereafter acquired, and in our customer service agreement and service payments thereunder during the term of the equipment lease.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> During the three and six months ended June 30, 2012, we made lease payments totaling approximately $422,096 and $844,191 of which $402,614 and $791,195 was applied toward the outstanding lease with $19,482 and $52,996, respectively, included in interest expense. Additionally, we recognized amortization of the lease acquisition fee of $12,567 and $25,134 which was included in interest expense for the three and six months ended June 30, 2012, respectively.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> During the three and six months ended June 30, 2011, we made lease payments totaling approximately $422,096 and $844,191 of which $349,351 and $686,524 was applied toward the outstanding lease with $72,745 and $157,667, respectively, included in interest expense. Additionally, we recognized amortization of the lease acquisition fee of $12,567 and $25,134 which was included in interest expense for the three and six months ended June 30, 2011, respectively.</div> <!--EndFragment--></div> </div>
6129632
961265
2174689
403259
-558006
-3954943
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Cash and Cash Equivalents</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We consider all cash on hand and in banks, and highly liquid investments with maturities of three months or less, to be cash equivalents. At June 30, 2012 and December 31, 2011, we had bank balances of $139,982 and $909,182, respectively, in excess of amounts insured by the Federal Deposit Insurance Corporation. We have not experienced any losses in such accounts, and believe we are not exposed to any significant credit risk on cash and cash equivalents.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Current financial market conditions have had the effect of restricting liquidity of cash management investments and have increased the risk of even the most liquid investments and the viability of some financial institutions. We do not believe, however, that these conditions will materially affect our business or our ability to meet our obligations or pursue our business plans.</div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 13 - Supplemental Cash Flow Information</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 2012</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> During the six months ended June 30, 2012, we issued 250,000 shares of our common stock valued at $137,500 to one consultant in consideration for cancellation of a warrant issued for consulting services rendered.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> For the six months ended June 30, 2012 an aggregate non-cash expense of $265,636 was recorded for the accretion of notes payable as follows: (i) $166,668 for the unsecured convertible note and (ii) $98,968 for the Bridge Loan.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> For the six months ended June 30, 2012, we recognized $723,194 in depreciation and amortization expense from the following: (i) $396,520 related to cost of sales for equipment used directly by or for customers, (ii) $321,599 related to other property and equipment, and (iii) $5,075 for patent amortization.</div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> <br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 2011</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> During the six months ended June 30, 2011, we granted options to acquire up to 600,000 shares of our common stock valued at $389,000 to two consultants in consideration of consulting services to be rendered by the consultants over a one year period pursuant to a written consulting agreement. The value of options is being recognized over the contract period and for the six months ended June 30, 2011, $167,566 was included in stock based compensation.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> On March 21, 2011, the Company, converted $784,292 of its short-term debt into equity through the issuance of common stock and warrants to two lenders at the same unit pricing as the Equity Financing. In consideration of converting the short- term loans on the basis of $1.20 for two shares of common stock plus one warrant at an exercise price of $1.00, the Company issued 1,307,153 shares of common stock and warrants to acquire up to 653,576 shares of common stock, which warrants have a five year term and are exercisable at $1.00 per share. The Company's objective for converting the short-term debt into equity was to conserve cash for further market development.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In March 2011, we granted to the holder of our senior unsecured convertible note a warrant to acquire 400,000 shares of our common stock at an exercise price of $.05 per share in consideration of a waiver of the holder's reset provision that allowed us to convert certain short terms loans to equity without causing an adjustment in the conversion price of our senior note. The warrants have a 5 - year life from the date of grant, contain full-ratchet anti-dilution price protection provisions and were valued $404,000 using a Black Scholes pricing model on the date of grant.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> For the six months ended June 30, 2011 an aggregate non-cash expense of $166,668 was recorded for the accretion of the unsecured convertible note.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> For the six months ended June 30, 2011, we recognized $749,312 in depreciation and amortization expense from the following: (i) $401,152 related to cost of sales for equipment used directly by or for customers, (ii) $343,084 related to equipment other property and equipment, and (iii) $5,076 for patent amortization.</div> <!--EndFragment--></div> </div>
909182
139982
1.0
1.8
0.9
0.96
0.65
0.53
0.35
0.65
0.35
0.05
1.0
0.35
0.78
653576
5208333
5500000
75000
221758
357500
247500
65000
247500
12408000
4262400
800000
1000000
18470400
400000
75000
1065000
0.05
0.05
180000000
180000000
75975656
107227820
3798783
5361391
0.91
0.86
372272
396520
401152
2591458
1345966
2896092
1620555
1307153
1307153
24816000
1600000
2000000
2000000
653576
784292
675000
500000
400000
760000
900000
500000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 6 - Notes Payable</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The recorded value of our notes payable (net of debt discount) for the six months ended June 30, 2012 and year ended December 31, 2011 was as follows:</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="MARGIN-LEFT: 0pt; text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="96%"> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="76%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> December 31, 2011</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> June 30, 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" width="76%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Amended and Restated Senior 6.25% Convertible Note</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">6,180,816</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Unsecured Convertible Note</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">340,504</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">507,172</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Bridge Loan Note Payable</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,196,141</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">798,584</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Equipment Purchase and Sale Agreement</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">700,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">8,417,461</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,305,756</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Less Current Portion</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(2,068,016</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(798,584</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total Long-term</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">6,349,445</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">507,172</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Amended and Restated Senior 6.25% Convertible Note</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> On December 24, 2007, we entered into a securities purchase agreement in which we raised $15,000,000. We used the proceeds from this financing to support our CodecSys commercialization and development and for general working capital purposes. Pursuant to the financing, we issued a senior secured convertible note in the principal amount of $15,000,000. The senior secured convertible note was originally due December 21, 2010, but was extended to December 21, 2013 and has been subsequently retired as discussed below.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> On March 26, 2012, we closed on an equity financing (the "2012 Equity Financing"), as well as a restructuring of our outstanding senior convertible indebtedness (the "2012 Debt Restructuring"), resulting in complete satisfaction of our senior indebtedness under the Amended and Restated Note.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> A portion of the net proceeds from the 2012 Equity Financing was used to close on the 2012 Debt Restructuring. The Company paid $2,750,000 and issued 2,000,000 shares of common stock valued at $760,000 in satisfaction of the Amended and Restated Note and remaining interest value of $680,816. In consideration of negotiating the 2012 Debt Restructuring and amending our agreement with our placement agent, we paid $275,041 and issued to it 586,164 shares of our common stock valued at $222,742 and recognized a $2,173,033 gain on extinguishment of debt as a result of this retirement.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> With the retirement of the Amended and Restated Note we recorded no aggregate derivative liability at March 31, 2012, however at the date of retirement we recorded a derivative valuation gain of $203,700, related to the conversion feature of the Amended and Restated Note to reflect the change in value of the aggregate derivative from December 31, 2011 to the date of retirement. The derivative value of $81,500 at the date of retirement was recorded as additional paid in capital.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> As of March 31, 2011 we recorded an aggregate derivative liability of $1,711,100, related to the conversion features of the Amended and Restated Note and the conversion feature and warrants related to the Original Note. A derivative valuation gain of $896,300 was recorded during the three months ended March 31, 2011, to reflect the change in value of the aggregate derivative liability from December 31, 2010 to March 31, 2011.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Unsecured Convertible Note</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> On September 29, 2006, we entered into a letter of understanding with Triage Capital Management, or Triage, dated as of September 25, 2006. The letter of understanding provided that Triage loan $1,000,000 to us in exchange for us entering into, on or prior to October 30, 2006, a convertible note securities agreement. It was intended that the funding provided by Triage be replaced by a convertible note and accompanying warrants, as described below. Effective November 2, 2006, we entered into securities purchase agreement, a 5% convertible note, a registration rights agreement, and four classes of warrants to purchase our common stock, all of which were with an individual note holder, the controlling owner of Triage, who caused our agreement with Triage to be assigned to him, which satisfied our agreement with Triage. Pursuant to the securities purchase agreement, we sold to the convertible note holder a three-year convertible note in the principal amount of $1,000,000 representing the funding received by us on November 2, 2006.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> On December 23, 2009 we entered into an amendment with the holder of our unsecured convertible note which increased the annual rate of interest from 5% to 8% commencing October 16, 2009.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> On December 24, 2010 we closed on a Debt Restructuring. In connection with that Debt Restructuring the <font style="DISPLAY: inline">maturity date of an amended note was extended to December 31, 2013.</font></div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> During March 2011, we issued 135,369 shares of common stock to the holder of our unsecured convertible note in satisfaction of $81,221 of accrued interest on the unsecured convertible note. Also in connection with the satisfaction of the accrued interest we granted to the holder a warrant to acquire up to 221,758 additional shares of our common stock at an exercise price of $0.96 per share. The warrant is exercisable at any time for a five-year period. For the year ended December 31, 2011, the $157,400 value of the warrant was included in interest expense.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We recorded an aggregate derivative liability of $326,400 and $769,300 as of June 30, 2012 and 2011, respectively, related to the conversion feature of the note. A derivative valuation loss of $26,400 and a derivative valuation gain of $623,600, respectively, were recorded to reflect the change in value of the aggregate derivative liability since December 31, 2011 and December 31, 2010, respectively. The aggregate derivative liability of $326,400 for the conversion feature of the note was calculated using the Black-Scholes pricing model with the following assumptions: (i) risk free interest rate .26%, (ii) expected life (in years) of 1.5; (iii) expected volatility of 68.50%; (iv) expected dividend yield of 0.00%; and (v) stock trading price of $0.25.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In connection with the amendment mentioned above, the principal value of the note is being accreted due to the difference in the value of the conversion feature before and after the amendment. The principal value of $1,000,000 of the unsecured convertible note was accreted over the amended term of the obligation, for which $83,334 and $166,668 was included in interest expense for both the three and six months ended June 30, 2012 and 2011, respectively. The note bears an 8% annual interest rate payable semi-annually, and for both the three and six months ended June 30, 2012 and 2011, $20,000 and $40,000, respectively was included in interest expense.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Accounts Receivable Purchase Agreements</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> During the year ended December 31, 2010 we entered into two Accounts Receivable Purchase Agreements with one individual for an aggregate amount of $775,000. In these agreements, we pledged certain outstanding accounts receivable in exchange for advanced payment and a commitment to remit to the purchaser the amount advanced upon collection from our customer. Terms of the first agreement under which we were advanced $275,000 include a 3% discount with a 3% interest fee for every 30 days the advances remain outstanding. Terms of the second agreement under which we were advanced $500,000 include a 10% discount with a 0.5% interest fee for every 30 days the advances remain outstanding.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> During the three months March 31, 2011 we remitted $100,000 of the principal balance plus accrued interest of $8,360 and converted the remaining $675,000 of principal balance plus $109,292 of accrued and unpaid interest into 1,307,153 shares of our common stock and warrants to purchase an additional 653,576 shares of our common stock. The warrants contain anti-dilution price protection provisions in the event the Company issues stock or convertible debt with a purchase price or conversion price less than $1.00 per share.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> At June 30, 2012 and 2011 we recorded an aggregate derivative liability of $50,200 and $348,200 related to the warrant reset provision. A derivative valuation gain of $106,100 and $101,900 was recorded to reflect the change in value of the aggregate derivative liability since December 31, 2010 and 2011, respectively. The aggregate derivative liability of $50,200 for the reset provision of the warrants was calculated using the Black-Scholes pricing model with the following assumptions: (i) risk free interest rate 0.49%, (ii) expected life (in years) of 3.7; (iii) expected volatility of 78.72%; (iv) expected dividend yield of 0.00%; and (v) stock trading price of $0.25.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Bridge Loan</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> <font style="DISPLAY: inline">On December 28, 2011 we entered into a Note and Warrant Purchase and Security Agreement with seven individuals for an aggregate of $1,300,000</font> ("Bridge Loan") to be used as working capital<font style="DISPLAY: inline">. The note bears an annual interest rate of 18%, payable monthly in cash. Additionally, we</font> granted to the holders of the Bridge Loan warrants with a five year term to purchase an aggregate of 357,500 shares of our common stock at an exercise price of $0.65 and subsequently reset to $0.53, per share which <font style="DISPLAY: inline">expires five years after the issuance date. The note was due on February 28, 2012, but the term</font> was subsequently extended to the earlier of the date nine months from the original maturity date or the date we close on an additional sale of our securities that results in gross proceeds to us of $12 million. In consideration of the extension of the maturity date of the Bridge Loan, we granted the holders of the Bridge Loan warrants with a six year term to purchase 247,500 shares of our common stock at an exercise price of $0.35 per share. <font style="DISPLAY: inline">This note is collateralized by a security interest in all of our accounts receivable</font></div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> <font style="DISPLAY: inline">In connection with the Bridge Loan, we paid an $84,500 placement fee and issued warrants to purchase 65,000 shares of our common stock at an exercise price of $0.65 per share and</font> subsequently reset to $0.53, <font style="DISPLAY: inline">to our investment banker for services in completing the above transaction and paid a $3,000 escrow fee to the Escrow Agent in exchange for holding the funds prior to their disbursement to us.</font></div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> On March 26, 2012, we closed on the 2012 Equity Financing and under the terms of the associated securities purchase agreement, two of the above described bridge lenders converted the principal balance of their portion of the bridge loan in the amount of $400,000 to common stock and warrants as part of and on the same terms as the 2012 Equity Financing, reducing the outstanding principal balance to $900,000. The warrants issued had a total value of $222,426 which resulted in a loss on extinguishment of debt of $222,426. The aggregate derivative liability and valuation gain or loss for the warrants issued for the converted portion of the principal balance are included in the aggregate of 2012 Equity Financing information. See Note 7.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> All warrants mentioned above were issued with price protection provisions and were accounted for as derivative liabilities and valued using a Black Scholes pricing model.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> At June 30, 2012 we recorded an aggregate derivative liability of $46,700 related to the reset provision for the original and placement warrants issued. A derivative valuation gain of $97,000 was recorded to reflect the change in value of the aggregate derivative liability from December 31, 2011. The aggregate derivative liability of $46,700 for the reset provision of the warrants was calculated using the Black-Scholes pricing model with the following assumptions: (i) risk free interest rate 0.72%, (ii) expected life (in years) of 4.5; (iii) expected volatility of 79.87%; (iv) expected dividend yield of 0.00%; and (v) stock trading price of $0.25.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> At June 30, 2012 we recorded an aggregate derivative liability of $34,700 related to the reset provision for the warrants issued for an extension of the maturity date. A derivative valuation gain of $61,825 was recorded to reflect the change in value of the aggregate derivative liability from the time the warrants were issued. The aggregate derivative liability of $34,700 for the reset provision of the warrants was calculated using the Black-Scholes pricing model with the following assumptions: (i) risk free interest rate 0.72%, (ii) expected life (in years) of 4.5; (iii) expected volatility of 79.74%; (iv) expected dividend yield of 0.00%; and (v) stock trading price of $0.25.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The principal value of the note is being accreted over the amended term of the obligation, for which $51,848 and $98,968 were included in interest expense for the three and six months ended June 30, 2012, respectively. The note bears an 18% annual interest rate, and for the three and six months ended June 30, 2012, $40,389 and $95,130, respectively were included in interest expense.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Equipment Purchase and Sale Agreement</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In October 2011, we entered into an Equipment Purchase and Sale Agreement with a lender whereby we use the funds advanced to purchase certain electronic receiving and digital signage equipment along with installation costs. A 3% fee was due each month the amount remained outstanding.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 36pt"> On March 26, 2012, we closed on the 2012 Equity Financing and under the terms of the associated securities purchase agreement the above described lender converted the principal balance of its portion of the loan in the amount of $500,000 to common stock and warrants as part of and on the same terms as the 2012 Equity Financing, the remaining $200,000 principal balance plus $105,000 of interest due was paid in cash. Of the $105,000 paid, $42,000 was accrued from 2011 and $63,000 was included in interest expense for the three months ended March 31, 2012. The warrants issued had a total value of $278,032 which resulted in a loss on extinguishment of debt of $278,032. The aggregate derivative liability and valuation gain or loss for the warrants issued for the converted portion of the principal balance are included in the aggregate of 2012 Equity Financing information. See Note 7.</div> <!--EndFragment--></div> </div>
1.2
0.05
1.8
1.35
40000
20000
40000
20000
7200000
15000000
1300000
1000000
0.0625
0.05
0.08
0.08
0.18
2013-12-21
2010-12-22
2013-12-31
791195
402614
686524
349351
1 year
123278
64371
10449
1440
326675
164043
348159
167366
723194
749312
321599
343084
4309537
4309537
3760200
4309537
81500
1711100
769300
326400
34700
46700
6625000
750000
348200
50200
3101537
2955264
146273
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> <font style="DISPLAY: inline; FONT-WEIGHT: bold">Note 12 -</font> <font style="FONT-STYLE: italic; DISPLAY: inline; FONT-WEIGHT: bold">Recent Accounting Pronouncements</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In December 2011, the FASB issued ASU 2011-12, <font style="FONT-STYLE: italic; DISPLAY: inline">Comprehensive Income (Topic 220): Presentation of Comprehensive Income.</font> This Update defers certain paragraphs of ASU 2011-05 so that reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. All other requirements of ASU 2011-05 are not affected. This Update is effective for fiscal years beginning after December 15, 2011 for public entities and for fiscal years ending after December 15, 2012 for private companies to be consistent with ASU 2011-05. The Company will not present reclassifications in and out of other comprehensive income in accordance with this Update in 2012, but will present other comprehensive income as per ASU 2011-05 starting with the first quarter of 2012.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In June 2011, the FASB issued ASU 2011-05, <font style="FONT-STYLE: italic; DISPLAY: inline">Comprehensive Income (Topic 220) - Presentation of Comprehensive Income.</font> This Update eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity in order to increase the prominence of other comprehensive income items and to facilitate convergence with IFRS. The Update requires that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements (a statement of income and statement of other comprehensive income). Additionally, adjustments for items reclassified from other comprehensive income to net income must be presented on the face of the financial statements. This Update should be applied retrospectively. For public entities, the Update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. For nonpublic entities, the Update is effective for fiscal years ending after December 15, 2012, and interim and annual periods thereafter. Early adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. This impacts how items for Other Comprehensive Income are presented and the Company will follow the guidance starting in Q1 2012.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In December 2011, the FASB issued ASU 2011-11, <font style="FONT-STYLE: italic; DISPLAY: inline">Balance Sheet (Topic 210) - Disclosures about Offsetting Assets and Liabilities.</font> This Update is applicable to all entities that have financial instruments and derivative instruments that are either 1) offset in accordance with current guidance or 2) subject to an enforceable master netting arrangement. The Update requires an entity with these types of instruments to disclose information about offsetting and related arrangements. Both net and gross information for these assets and liabilities is required to be disclosed. This Update is effective for fiscal years beginning on or after January 1, 2013. The Company doesn't expect this Update to impact the Company's financials since it does not currently have any financial instruments or derivative instruments that are offset.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In September 2011, the FASB issued ASU 2011-08, <font style="FONT-STYLE: italic; DISPLAY: inline">Intangibles - Goodwill and Other (Topic 350)- Testing Goodwill for Impairment.</font> The objective of this Update is to simplify how entities test goodwill for impairment. This Update now allows entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step process of (1) comparing the fair value of the reporting unit to its carrying value and (2) test to measure the amount of the impairment loss if the fair value is less than the carrying value. The more likely than not threshold is defined as having a likelihood of more than 50%. The option to first assess qualitative factors can be bypassed and an entity can proceed directly to performing the first step of the two-step goodwill impairment test. Some examples of circumstances to consider are 1) macroeconomic conditions, 2) industry and market conditions, 3) cost factors that have a negative impact on earnings, 4) overall financial performance such as negative or declining cash flows 5) other relevant entity specific events and 6) sustained decrease in stock price. The Update is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011 if the financial statements have not been issued. If necessary, the Company will evaluate whether or not it will utilize the qualitative assessment option prior to performing the first goodwill impairment test in 2012, typically done during the 4<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font> quarter.</div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 4 - Stock-based Compensation</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In accordance with ASC Topic 718, stock-based compensation cost is estimated at the grant date, based on the estimated fair value of the awards, and recognized as expense ratably over the requisite service period of the award for awards expected to vest.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Stock Incentive Plans</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> <font style="DISPLAY: inline">Under the Broadcast International, Inc. 2004 Long-Term Incentive Plan (the "2004 Plan"), the board of directors may issue incentive stock options to employees and directors and non-qualified stock options to consultants of the company.</font> Options generally may not be exercised until twelve months after the date granted and expire ten years after being granted. Options granted vest in accordance with the vesting schedule determined by the board of directors, usually ratably over a three-year vesting schedule upon the anniversary date of the grant. Should an employee terminate before the vesting period is completed, the unvested portion of each grant is forfeited. We have used the Black-Scholes valuation model to estimate fair value of our stock-based awards, which requires various judgmental assumptions including estimated stock price volatility, forfeiture rates, and expected life. Our computation of expected volatility is based on a combination of historical and market-based implied volatility. The number of unissued stock options authorized under the 2004 Plan at June 30, 2012 was 2,678,131.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The Broadcast International, Inc. 2008 Equity Incentive Plan (the "2008 Plan") has become our primary plan for providing stock-based incentive compensation to our eligible employees and non-employee directors and consultants of the company. The provisions of the 2008 Plan are similar to the 2004 Plan except that the 2008 Plan allows for the grant of share equivalents such as restricted stock awards, stock bonus awards, performance shares and restricted stock units in addition to non-qualified and incentive stock options. We continue to maintain and grant awards under our 2004 Plan which will remain in effect until it expires by its terms. The number of unissued shares of common stock reserved for issuance under the 2008 Plan was 1,065,000 at June 30, 2012.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Stock Options</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> <font style="DISPLAY: inline">We estimate the fair value of stock option awards granted beginning January 1, 2006 using the Black-Scholes option-pricing model. We then amortize the fair value of awards expected to vest on a straight-line basis over the requisite service periods of the awards, which is generally the period from the grant date to the end of the vesting period. The Black-Scholes valuation model</font> requires various judgmental assumptions including the estimated volatility, risk-free interest rate and expected option term. Our computation of expected volatility is based on a combination of historical and market-based implied volatility. <font style="DISPLAY: inline">The risk-free interest rate was based on the yield curve of a zero-coupon U.S. Treasury bond on the date the stock option award was granted with a maturity equal to the expected term of the stock option award. The expected option term is derived from an analysis of historical experience of similar awards combined with expected future exercise patterns based on several factors including the strike price in relation to the current and expected stock price, the minimum vest period and the remaining contractual period.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The fair values for the options granted for the six months ended June 30, 2011 and 2012 were estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:</div> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="80%"> <tr> <td valign="top" width="28%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Six Months Ended</div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> June</font> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> 30, 2011</font></div> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Six Months Ended</div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> June</font> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> 30, 2012</font></div> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Risk free interest rate</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 1.91%</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 1.82%</div> </td> </tr> <tr bgcolor="white"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected life (in years)</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 10.25pt; text-align: center; TEXT-INDENT: 0pt"> 5.54</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 10.25pt; text-align: center; TEXT-INDENT: 0pt"> 10.0</div> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected volatility</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 82.03%</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 77.78%</div> </td> </tr> <tr bgcolor="white"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected dividend yield</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 0.00%</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 0.00%</div> </td> </tr> </table> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The weighted average fair value of options granted during the six months ended June 30, 2012 and 2011 was $0.37 and $0.69, respectively.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Warrants</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We <font style="DISPLAY: inline">estimate the fair value of issued warrants on the date of issuance as determined using a Black-Scholes pricing model. We amortize the fair value of issued warrants using a vesting schedule based on the terms and conditions of each associated underlying contract, as earned. The Black-Scholes valuation model</font> requires various judgmental assumptions including the estimated volatility, risk-free interest rate and warrant expected exercise term. Our computation of expected volatility is based on a combination of historical and market-based implied volatility. <font style="DISPLAY: inline">The risk-free interest rate was based on the yield curve of a zero-coupon U.S. Treasury bond on the date the warrant was issued with a maturity equal to the expected term of the warrant.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The fair values for the warrants issued for the six months ended June 30, 2011 and 2012 estimated at the date of issuance using the Black-Scholes option-pricing model with the following weighted average assumptions:</div> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="80%"> <tr> <td valign="top" width="28%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="top" width="18%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Six Months Ended</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> June 30, 2011</div> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="top" width="20%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Six Months Ended June</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 30, 2012</div> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Risk free interest rate</div> </td> <td valign="bottom" width="18%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2.04%</div> </td> <td valign="bottom" width="20%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 1.32%</div> </td> </tr> <tr bgcolor="white"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected life (in years)</div> </td> <td valign="bottom" width="18%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 8.8pt; text-align: center; TEXT-INDENT: 0pt"> 5.00</div> </td> <td valign="bottom" width="20%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 8.1pt; text-align: center; TEXT-INDENT: 0pt"> 5.99</div> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected volatility</div> </td> <td valign="bottom" width="18%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 85.82%</div> </td> <td valign="bottom" width="20%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 82.65%</div> </td> </tr> <tr bgcolor="white"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected dividend yield</div> </td> <td valign="bottom" width="18%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 0.00%</div> </td> <td valign="bottom" width="20%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 0.00%</div> </td> </tr> </table> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The weighted average fair value of warrants issued during the six months ended June 30, 2012 and 2011 was $0.27 and $0.79, respectively.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Results of operations for the six months ended June 30, 2011 and 2012 includes $1,786,873 and $193,585, respectively, of non-cash stock-based compensation expense. Restricted stock units and options issued to directors vest immediately. All other restricted stock units, options and warrants are subject to applicable vesting schedules. Expense is recognized proportionally as each award or grant vests.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Included in the $1,786,873 non-cash stock-based compensation expense for the six months ended June 30, 2011 are (i) $1,544,000 for 1,400,000 restricted stock units issued to all 5 members of the board of directors, (ii) $167,566 for 600,000 options issued to one individual and one corporation for consulting services, (iii) $14,433 for 426,700 options granted to 31 employees, (iv) $4,263 for 8,700 options granted to 15 of our non-employee installation technicians and (iv) $56,611 resulting from the vesting of unexpired options and warrants issued prior to January 1, 2011.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Included in the $193,585 non-cash stock-based compensation expense for the six months ended June 30, 2012 are (i) $31,000 for 100,000 restricted stock units issued to one member of the board, (ii) $1,608 for 30,000 options granted to 2 employees and (iii) $160,977 resulting from the vesting of unexpired options and warrants issued prior to January 1, 2012.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The impact on our results of operations for recording stock-based compensation for the six months ended June 30, 2011 and 2012 is as follows:</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="MARGIN-LEFT: 36pt; text-align: left"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="96%"> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="52%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="22%" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 18pt"> For the three months ended</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 18pt"> June 30,</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="22%" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> For the six months ended</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> June 30,</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="52%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 18pt"> 2011</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2011</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> General and administrative</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">203,366</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">61,098</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,681,783</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">120,228</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Research and development</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">36,965</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">36,965</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">105,090</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">73,357</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">240,331</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">97,420</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,786,873</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">193,585</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Due to unexercised options and warrants outstanding at June 30, 2012, we will recognize an additional aggregate total of $362,503 of compensation expense over the next four years based upon option and warrant award vesting parameters as shown below:</div> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="60%"> <tr> <td valign="bottom" width="82%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="16%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="82%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 2012</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">96,925</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="82%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 2013</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">178,427</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="82%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 2014</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">86,910</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="82%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 2015</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">241</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="82%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">362,503</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The following unaudited tables summarize option and warrant activity during the six months ended June 30, 2012.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="80%"> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="70%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="13%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Options</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> and</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Warrants</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Outstanding</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="13%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Weighted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Average</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercise</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Price</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" width="70%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="13%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="13%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Outstanding at December 31, 2011</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">20,440,551</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">1.10</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Options granted</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">30,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">0.50</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Warrants issued</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">18,717,900</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">0.35</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Expired</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">(140,169</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">1.31</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Forfeited</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">(537,542</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">1.09</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Exercised</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="70%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Outstanding at June 30, 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">38,510,740</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">0.64</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The following table summarizes information about stock options and warrants outstanding at June 30, 2012.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="90%"> <tr bgcolor="#ffffff"> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="10%" colspan="2"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="48%" colspan="11" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Outstanding</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="32%" colspan="7" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercisable</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#ffffff"> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="3" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Weighted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Average</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Remaining</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Weighted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Average</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="3" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Weighted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Average</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#ffffff"> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="15%" colspan="2"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Range of</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercise Prices</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="16%" colspan="3" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Number</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Outstanding</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Contractual</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Life (years)</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercise</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Price</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="16%" colspan="3" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Number</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercisable</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercise</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Price</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td valign="bottom" width="10%" align="right" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 0.35-0.95</td> <td valign="bottom" width="5%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"> 34,122,561</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 4.78</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 0.53</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"> 33,497,561</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 0.53</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> 1.00-1.65</div> </td> <td valign="bottom" width="5%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"> 3,443,179</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 3.90</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 1.04</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"> 3,222,812</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 1.04</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right; TEXT-INDENT: 0pt"> 2.25-5.00</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="5%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right" valign="bottom" width="9%">945,000</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">3.84</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">3.10</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right" valign="bottom" width="9%">945,000</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">3.10</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="10%" align="right">$0.35-5.00</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="5%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right" valign="bottom" width="9%">38,510,740</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">4.68</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">0.64</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right" valign="bottom" width="9%">37,665,373</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">0.64</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; TEXT-INDENT: 0pt"> Restricted Stock Units</div> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The value of restricted stock units is determined using the fair value of our common stock on the date of the award and compensation expense is recognized in accordance with the vesting schedule. During the six months ended June 30, 2012 and 2011, we awarded 100,000 and 1,400,000 restricted stock units, respectively.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> The following is a summary of restricted stock unit activity for the six months ended June 30, 2012.</div> <div style="MARGIN-LEFT: 54pt; text-align: left"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="94%"> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="76%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Restricted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Stock Units</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Weighted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Average</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Grant</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Date Fair</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Value</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" width="76%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Outstanding at December 31, 2011</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,550,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1.25</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Awarded at fair value</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">100,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.31</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Canceled/Forfeited</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Settled by issuance of stock</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Outstanding at June 30, 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,650,000</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1.22</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Vested at June 30, 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,650,000</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1.22</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
3251668
2750000
2750000
0.01
0.01
0.0
0.01
0.01
0.01
0.0
0.01
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 3 - Weighted Average Shares</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Basic earnings per common share is computed by dividing net income or loss applicable to common shareholders by the weighted average number of shares outstanding during each period. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year, plus the dilutive common stock equivalents that would rise from the exercise of stock options, warrants and restricted stock units outstanding during the period, using the treasury stock method and the average market price per share during the period, plus the effect of assuming conversion of the convertible debt.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The following table sets forth the computation of basic and diluted earnings per common share for the three and six month periods ended June 30, 2011 and 2012:</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="text-align: left"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </td> <td valign="bottom" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> For the three months ended</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </td> <td valign="bottom" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> For the six months ended</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> June 30,</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> June 30,</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2011</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2011</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Numerator</div> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Net income (loss)</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">442,324</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">847,192</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(304,641</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">661,715</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Effect on earnings of dilutive<br /> convertible debt</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(225,266</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">233,068</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Net income (loss) plus assumed<br /> conversions</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">442,324</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">621,926</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(304,641</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">894,783</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Denominator</div> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: -9pt"> Basic weighted average shares<br /> outstanding</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">75,576,100</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">107,193,974</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">74,916,500</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">94,167,466</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Effect of dilutive securities:</div> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Stock options and warrants</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">590,074</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,939,613</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Restricted stock units</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,350,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,935,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,935,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Convertible debt</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,000,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,000,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Diluted weighted average shares<br /> outstanding</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">78,516,174</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">114,128,974</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">74,916,500</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">104,042,079</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Net income (loss) per common share</div> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Basic</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(0.00</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Diluted</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(0.00</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Potentially dilutive securities representing 24,070,976 shares of common stock were excluded from the computation of diluted earnings per common share for the six months ended June 30, 2011 because their effect would have been anti-dilutive. As a result of incurring a net loss for the six months ended June 30, 2011, no potentially dilutive securities are included in the calculation of diluted earnings per share because such effect would be anti-dilutive.</div> <!--EndFragment--></div> </div>
390206
476468
362503
4
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="text-align: left"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Significant</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Quoted Prices in</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Other</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Significant</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Active Markets for</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Observable</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Unobservable</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Identical Assets</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Inputs</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Inputs</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Total</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> (Level 1)</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> (Level 2)</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> (Level 3)</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Assets</div> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 2px; PADDING-LEFT: 3%" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> None</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total assets measured at fair value</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Liabilities</div> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 2px; PADDING-LEFT: 3%" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Derivative valuation (1)</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,309,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,309,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total liabilities measured at fair value</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,309,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,309,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> (1) See Note 6 for additional discussion.</div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 9 - Fair Value Measurements</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 18pt"> The Company has certain financial instruments that are measured at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy has been established which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr valign="top"> <td style="WIDTH: 18pt"> </td> <td style="WIDTH: 18pt"> <div style="DISPLAY: inline; font-family: Symbol, serif; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"> ·</div> </td> <td> <div style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; text-align: left"> Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;</div> </td> </tr> </table> </div> <div> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr valign="top"> <td style="WIDTH: 18pt"> </td> <td style="WIDTH: 18pt"> <div style="DISPLAY: inline; font-family: Symbol, serif; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"> ·</div> </td> <td> <div style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; text-align: left"> Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and</div> </td> </tr> </table> </div> <div> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr valign="top"> <td style="WIDTH: 18pt"> </td> <td style="WIDTH: 18pt"> <div style="DISPLAY: inline; font-family: Symbol, serif; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"> ·</div> </td> <td> <div style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; text-align: left"> Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.</div> </td> </tr> </table> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 18pt"> We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at June 30, 2012:</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="text-align: left"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Significant</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Quoted Prices in</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Other</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Significant</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Active Markets for</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Observable</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Unobservable</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Identical Assets</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Inputs</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Inputs</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Total</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> (Level 1)</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> (Level 2)</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> (Level 3)</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Assets</div> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 2px; PADDING-LEFT: 3%" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> None</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total assets measured at fair value</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Liabilities</div> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 2px; PADDING-LEFT: 3%" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Derivative valuation (1)</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,309,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,309,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total liabilities measured at fair value</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,309,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,309,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> (1) See Note 6 for additional discussion.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The table below presents our assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at June 30, 2012. We classify financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="80%"> <tr> <td valign="bottom" width="85%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="13%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Derivative</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" width="85%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="13%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Valuation</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="85%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="13%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Liability</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Balance at December 31, 2011</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">(3,760,200</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> </tr> <tr bgcolor="white"> <td valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total gains or losses (realized and unrealized)</div> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-LEFT: 1%" valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Included in net loss</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">4,588,480</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-LEFT: 1%" valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Valuation adjustment</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Purchases, issuances, and settlements, net</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">(5,137,817</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Transfers to Level 3</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Balance at June 30, 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">(4,309,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> </tr> </table> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Fair Value of Other Financial Instruments</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> The carrying amounts of our accounts receivable, accounts payable and accrued liabilities approximate their fair values due to their immediate or short-term maturities. The aggregate carrying amount of the notes payable approximates fair value as the individual notes bear interest at market interest rates and there has not been a significant change in our operations and risk profile.</div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="80%"> <tr> <td valign="bottom" width="85%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="13%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Derivative</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" width="85%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="13%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Valuation</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="85%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="13%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Liability</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Balance at December 31, 2011</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">(3,760,200</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> </tr> <tr bgcolor="white"> <td valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total gains or losses (realized and unrealized)</div> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-LEFT: 1%" valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Included in net loss</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">4,588,480</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-LEFT: 1%" valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Valuation adjustment</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Purchases, issuances, and settlements, net</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">(5,137,817</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Transfers to Level 3</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="85%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Balance at June 30, 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">(4,309,537</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> </tr> </table> </div> <!--EndFragment--></div> </div>
4588480
5137817
3760200
4309537
131079
126004
20
10121
10121
11588
10121
11343
4588480
2959155
6406200
2186900
203700
896300
-26400
623600
97000
61825
2125000
4125000
144000
106100
101900
1659855
-1640
-1799
-362
240
1672575
-970033
2173033
222426
-278032
2588601
1259320
3844700
1236328
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Patents and Intangibles</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Patents represent initial legal costs incurred to apply for United States and international patents on the CodecSys technology, and are amortized on a straight-line basis over their useful life of approximately 20 years. We have filed several patents in the United States and foreign countries. As of June 30, 2012, the United States Patent and Trademark Office had approved four patents. Additionally, eleven foreign countries had approved patent rights. While we are unsure whether we can develop the technology in order to obtain the full benefits, the patents themselves hold value and could be sold to companies with more resources to complete the development. On-going legal expenses incurred for patent follow-up have been expensed from July 2005 forward.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Amortization expense recognized on all patents totaled $2,538 and $5,076 for both the three and six months ended June 30, 2012 and 2011, respectively. Estimated amortization expense, if all patents were issued at the beginning of 2012, for each of the next five years is as follows:</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="text-align: left; TEXT-ALIGN: center"> <table style="TEXT-ALIGN: center; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="50%"> <tr style="TEXT-ALIGN: center"> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Year ending</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> December 31:</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="35%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="18%" colspan="2" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2012</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">11,588</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2013</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">11,343</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2014</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">10,121</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2015</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">10,121</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2016</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">10,121</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> </table> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> </div> <!--EndFragment--></div> </div>
1153627
654022
1148329
736602
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; TEXT-INDENT: 0pt"> Long-Lived Assets</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We review our long-lived assets, including patents, annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, then the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Fair value is determined by using cash flow analyses and other market valuations.</div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Income Taxes</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We account for income taxes in accordance with the asset and liability method of accounting for income taxes prescribed by ASC Topic 740. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income in the years in which those temporary differences are expected to be recovered or settled.</div> <!--EndFragment--></div> </div>
1414189
-560075
-26358
-129112
-9009
-31629
270721
60082
-195030
-108184
2939613
590074
4000000
4000000
2935000
2935000
2350000
606211
263483
569878
188689
95130
40389
42000
63000
233068
-225266
248643
201042
350434
105000
8360
72570
-608066
60851
331572
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Inventories</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Inventories consisting of electrical and computer parts are stated at the lower of cost or market determined using the first-in, first-out method.</div> <!--EndFragment--></div> </div>
1
1
1986
1198
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 11 - <font style="FONT-STYLE: italic; DISPLAY: inline">Interact Devices Inc. (IDI)</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We began investing in and advancing monies to IDI in 2001. IDI was developing technology which became CodecSys.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> On October 23, 2003, IDI filed for Chapter 11 Federal Bankruptcy protection. We desired that the underlying patent process proceed and that the development of CodecSys technology continue. Therefore, we participated in IDI's plan of reorganization, whereby we agreed to satisfy the debts of the creditors and obtained certain licensing rights. On May 18, 2004, the debtor-in-possession's plan of reorganization for IDI was confirmed by the United States Bankruptcy Court. As a result of this confirmation, we issued to the creditors of IDI approximately 111,800 shares of our common stock, and cash of approximately $312,768 in exchange for approximately 50,127,218 shares of the common stock of IDI, which increased our aggregate common share equivalents in IDI to approximately 51,426,719 shares.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Since May 18, 2004, we have acquired an aggregate of 4,470,450 additional common share equivalents IDI. As of June 30, 2012, we owned approximately 55,897,169 IDI common share equivalents, representing approximately 94% of the total outstanding IDI share equivalents.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Since May 18, 2004, we have advanced additional cash to IDI for the payment of operating expenses, which continues development and marketing of the CodecSys technology. As of June 30, 2012 we have advanced an aggregate amount of $3,251,668 pursuant to a promissory note that is secured by assets and technology of IDI.</div> <!--EndFragment--></div> </div>
157400
15073511
9086529
4543487
3398640
8724066
8579357
4309537
4309537
6349445
507172
Oct. 30, 2006
Sept. 25, 2006
1000000
1000000
6349445
507172
1357282
-794239
-141949
-281343
-1773339
-2879361
661715
847192
-304641
442324
661715
847192
-304641
442324
894783
621926
-304641
442324
4560018
2680221
4386233
1998052
8417461
1305756
6180816
340504
507172
1196141
798584
700000
2068016
798584
5051930
2487051
5839203
2292330
-3898303
-1833029
-4690874
-1555728
175008
273279
660361
456075
1067649
276455
1095309
2122
5183
-5446
-1597
0
1584
137500
19634
81221
109292
680816
275041
275041
84500
180000
3000
776483
24078
312768
142699
281583
200000000
20000000
0
0
406004
265700
203973
149247
6150000
13500000
18304
154000
275000
500000
750
240
1417134
839324
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Property and Equipment</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the property, generally from three to five years. Repairs and maintenance costs are expensed as incurred except when such repairs significantly add to the useful life or productive capacity of the asset, in which case the repairs are capitalized.</div> <!--EndFragment--></div> </div>
5
3
-5618
-9215
2500000
3741194
788465
200000
844191
422096
844191
422096
100000
1021414
464847
1223399
625628
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Research and Development</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Research and development costs are expensed when incurred. We expensed $464,847 and $1,021,414 of research and development costs for the three and six months ended June 30, 2012, respectively. We expensed $625,628 and $1,223,399 of research and development costs for the three and six months ended June 30, 2011, respectively.</div> <!--EndFragment--></div> </div>
-111187865
-110526150
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Revenue Recognition</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We recognize revenue when evidence exists that there is an arrangement between us and our customers, delivery of equipment sold or service has occurred, the selling price to our customers is fixed and determinable with required documentation, and collectability is reasonably assured. We recognize as deferred revenue, payments made in advance by customers for services not yet provided.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> When we enter into a multi-year contract with a customer to provide installation, network management, satellite transponder and help desk, or combination of these services, we recognize this revenue as services are performed and as equipment is sold. These agreements typically provide for additional fees, as needed, to be charged if on-site visits are required by the customer in order to ensure that each customer location is able to receive network communication. As these on-site visits are performed the associated revenue and cost are recognized in the period the work is completed. If we install, for an additional fee, new or replacement equipment to an immaterial number of new customer locations, and the equipment immediately becomes the property of the customer, the associated revenue and cost are recorded in the period in which the work is completed.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In instances where we have entered into license agreements with a third parties to use our technology within their product offering, we recognize any base or prepaid revenues over the term of the agreement and any per occurrence or periodic usage revenues in the period they are earned.</div> <!--EndFragment--></div> </div>
3745085
1999988
4044421
2357157
4100670
2100
144000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="MARGIN-LEFT: 0pt; text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="96%"> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="76%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> December 31, 2011</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> June 30, 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" width="76%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Amended and Restated Senior 6.25% Convertible Note</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">6,180,816</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Unsecured Convertible Note</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">340,504</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">507,172</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Bridge Loan Note Payable</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,196,141</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">798,584</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Equipment Purchase and Sale Agreement</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">700,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">8,417,461</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,305,756</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Less Current Portion</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(2,068,016</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(798,584</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total Long-term</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">6,349,445</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">507,172</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="text-align: left"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </td> <td valign="bottom" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> For the three months ended</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </td> <td valign="bottom" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> For the six months ended</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> June 30,</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> June 30,</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2011</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2011</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Numerator</div> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Net income (loss)</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">442,324</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">847,192</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(304,641</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">661,715</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Effect on earnings of dilutive<br /> convertible debt</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(225,266</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">233,068</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Net income (loss) plus assumed<br /> conversions</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">442,324</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">621,926</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(304,641</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">894,783</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Denominator</div> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: -9pt"> Basic weighted average shares<br /> outstanding</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">75,576,100</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">107,193,974</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">74,916,500</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">94,167,466</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Effect of dilutive securities:</div> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Stock options and warrants</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">590,074</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,939,613</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Restricted stock units</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,350,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,935,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,935,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Convertible debt</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,000,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">4,000,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Diluted weighted average shares<br /> outstanding</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">78,516,174</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">114,128,974</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">74,916,500</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">104,042,079</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Net income (loss) per common share</div> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Basic</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(0.00</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Diluted</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">(0.00</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.01</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="MARGIN-LEFT: 36pt; text-align: left"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="96%"> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="52%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="22%" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 18pt"> For the three months ended</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 18pt"> June 30,</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="22%" colspan="6" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> For the six months ended</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> June 30,</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="52%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 18pt"> 2011</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2011</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> General and administrative</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">203,366</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">61,098</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,681,783</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">120,228</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Research and development</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">36,965</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">36,965</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">105,090</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">73,357</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="52%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="52%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Total</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">240,331</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">97,420</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1,786,873</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">193,585</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><!--StartFragment--> <div style="text-align: left; TEXT-ALIGN: center"> <table style="TEXT-ALIGN: center; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="50%"> <tr style="TEXT-ALIGN: center"> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Year ending</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> December 31:</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="35%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="18%" colspan="2" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2012</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">11,588</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2013</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">11,343</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2014</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">10,121</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2015</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">10,121</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2016</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">10,121</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="MARGIN-LEFT: 54pt; text-align: left"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="94%"> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="76%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Restricted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Stock Units</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Weighted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Average</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Grant</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Date Fair</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> Value</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" width="76%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Outstanding at December 31, 2011</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,550,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1.25</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Awarded at fair value</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">100,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">0.31</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Canceled/Forfeited</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Settled by issuance of stock</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Outstanding at June 30, 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,650,000</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1.22</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="76%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Vested at June 30, 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">2,650,000</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1.22</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><!--StartFragment--> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="90%"> <tr bgcolor="#ffffff"> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="10%" colspan="2"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="48%" colspan="11" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Outstanding</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="32%" colspan="7" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercisable</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#ffffff"> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="2" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="3" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Weighted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Average</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Remaining</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Weighted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Average</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" colspan="3" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Weighted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Average</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#ffffff"> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="15%" colspan="2"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Range of</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercise Prices</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="16%" colspan="3" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Number</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Outstanding</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Contractual</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Life (years)</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercise</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Price</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="16%" colspan="3" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Number</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercisable</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="14%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercise</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Price</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td valign="bottom" width="10%" align="right" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 0.35-0.95</td> <td valign="bottom" width="5%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"> 34,122,561</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 4.78</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 0.53</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"> 33,497,561</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 0.53</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="10%" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: right; TEXT-INDENT: 0pt"> 1.00-1.65</div> </td> <td valign="bottom" width="5%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"> 3,443,179</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 3.90</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 1.04</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"> 3,222,812</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="TEXT-ALIGN: center" valign="bottom" width="13%"> 1.04</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" align="right"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right; TEXT-INDENT: 0pt"> 2.25-5.00</div> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="5%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right" valign="bottom" width="9%">945,000</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">3.84</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">3.10</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right" valign="bottom" width="9%">945,000</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">3.10</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="10%" align="right">$0.35-5.00</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="5%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right" valign="bottom" width="9%">38,510,740</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">4.68</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">0.64</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right" valign="bottom" width="9%">37,665,373</td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="6%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center" valign="bottom" width="13%">0.64</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="80%"> <tr> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="70%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="13%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Options</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> and</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Warrants</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Outstanding</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="13%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Weighted</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Average</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Exercise</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Price</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr> <td valign="bottom" width="70%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="13%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="13%" colspan="2" nowrap="nowrap" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Outstanding at December 31, 2011</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">20,440,551</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">1.10</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Options granted</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">30,000</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">0.50</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Warrants issued</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">18,717,900</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">0.35</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Expired</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">(140,169</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">1.31</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Forfeited</div> </td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">(537,542</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap">)</td> <td valign="bottom" width="1%" align="right" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">1.09</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 9pt"> Exercised</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 2px solid; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">--</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="70%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td valign="bottom" width="1%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td style="PADDING-BOTTOM: 4px" valign="bottom" width="70%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Outstanding at June 30, 2012</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">38,510,740</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px" valign="bottom" width="1%" align="right"> </td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="BORDER-BOTTOM: black 4px double; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="12%">0.64</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 4px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="80%"> <tr> <td valign="top" width="28%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Six Months Ended</div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> June</font> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> 30, 2011</font></div> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Six Months Ended</div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> June</font> <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> 30, 2012</font></div> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Risk free interest rate</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 1.91%</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 1.82%</div> </td> </tr> <tr bgcolor="white"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected life (in years)</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 10.25pt; text-align: center; TEXT-INDENT: 0pt"> 5.54</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 10.25pt; text-align: center; TEXT-INDENT: 0pt"> 10.0</div> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected volatility</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 82.03%</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 77.78%</div> </td> </tr> <tr bgcolor="white"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected dividend yield</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 0.00%</div> </td> <td valign="top" width="19%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 0.00%</div> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="text-align: center"> <table style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="80%"> <tr> <td valign="top" width="28%" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="top" width="18%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Six Months Ended</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> June 30, 2011</div> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="top" width="20%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Six Months Ended June</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 30, 2012</div> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Risk free interest rate</div> </td> <td valign="bottom" width="18%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2.04%</div> </td> <td valign="bottom" width="20%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 1.32%</div> </td> </tr> <tr bgcolor="white"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected life (in years)</div> </td> <td valign="bottom" width="18%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 8.8pt; text-align: center; TEXT-INDENT: 0pt"> 5.00</div> </td> <td valign="bottom" width="20%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 8.1pt; text-align: center; TEXT-INDENT: 0pt"> 5.99</div> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected volatility</div> </td> <td valign="bottom" width="18%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 85.82%</div> </td> <td valign="bottom" width="20%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 82.65%</div> </td> </tr> <tr bgcolor="white"> <td valign="top" width="28%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Expected dividend yield</div> </td> <td valign="bottom" width="18%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 0.00%</div> </td> <td valign="bottom" width="20%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 0.00%</div> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
1115240
598841
422945
263008
0.1
0.03
193586
1786873
1608
14433
160977
56611
50000
167566
31000
1544000
167566
4263
3
100000
1400000
100000
1400000
0.31
2550000
2650000
1.25
1.22
0
0
0
0
0
0
0
0
0
0
5.54
10
5
5.99
1.5
4.5
4.5
3.5
3.7
5.7
5.7
0.8203
0.7778
0.8582
0.8265
0.685
0.7974
0.7987
0.7405
0.7872
0.8437
0.8437
0.0191
0.0182
0.0204
0.0132
0.0026
0.0072
0.0072
0.0049
0.0049
0.0092
0.0092
2678131
140169
1.31
537542
1.09
30000
426700
600000
8700
500000
600000
30000
18717900
0.5
0.35
0.37
0.69
0.27
0.79
389000
20440551
38510740
1.1
0.64
0.53
1.04
3.1
0.64
0.35
0.35
1.0
2.25
33497561
3222812
945000
37665373
34122561
3443179
945000
38510740
0.53
1.04
3.1
0.64
4.78
3.9
3.84
4.68
5.0
0.95
1.65
5.0
137500
903
92400
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 5 - Significant Accounting Policies</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Cash and Cash Equivalents</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We consider all cash on hand and in banks, and highly liquid investments with maturities of three months or less, to be cash equivalents. At June 30, 2012 and December 31, 2011, we had bank balances of $139,982 and $909,182, respectively, in excess of amounts insured by the Federal Deposit Insurance Corporation. We have not experienced any losses in such accounts, and believe we are not exposed to any significant credit risk on cash and cash equivalents.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Current financial market conditions have had the effect of restricting liquidity of cash management investments and have increased the risk of even the most liquid investments and the viability of some financial institutions. We do not believe, however, that these conditions will materially affect our business or our ability to meet our obligations or pursue our business plans.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Accounts Receivable</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when collected.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Included in our $1,219,163 and $1,239,903 net accounts receivable for the six months ended June 30, 2012 and the year ended December 31, 2011, respectively, were (i) $1,184,804 and $1,269,579 for billed trade receivables, respectively; (ii) $80,625 and $23,814 of unbilled trade receivables (iii) $1,584 and $0 for employee travel advances and other receivables, respectively; less (iv) ($47,850) and ($53,490) for allowance for uncollectible accounts, respectively.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Inventories</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Inventories consisting of electrical and computer parts are stated at the lower of cost or market determined using the first-in, first-out method.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Property and Equipment</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the property, generally from three to five years. Repairs and maintenance costs are expensed as incurred except when such repairs significantly add to the useful life or productive capacity of the asset, in which case the repairs are capitalized.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Patents and Intangibles</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Patents represent initial legal costs incurred to apply for United States and international patents on the CodecSys technology, and are amortized on a straight-line basis over their useful life of approximately 20 years. We have filed several patents in the United States and foreign countries. As of June 30, 2012, the United States Patent and Trademark Office had approved four patents. Additionally, eleven foreign countries had approved patent rights. While we are unsure whether we can develop the technology in order to obtain the full benefits, the patents themselves hold value and could be sold to companies with more resources to complete the development. On-going legal expenses incurred for patent follow-up have been expensed from July 2005 forward.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Amortization expense recognized on all patents totaled $2,538 and $5,076 for both the three and six months ended June 30, 2012 and 2011, respectively. Estimated amortization expense, if all patents were issued at the beginning of 2012, for each of the next five years is as follows:</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="text-align: left; TEXT-ALIGN: center"> <table style="TEXT-ALIGN: center; FONT-FAMILY: times new roman; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0" width="50%"> <tr style="TEXT-ALIGN: center"> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Year ending</div> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> December 31:</div> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="35%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px" valign="bottom" width="18%" colspan="2" nowrap="nowrap"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2012</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">11,588</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2013</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">11,343</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2014</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">10,121</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2015</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">10,121</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="44%"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> 2016</div> </td> <td valign="bottom" width="35%" align="left" style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%"> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="15%">10,121</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="3%" nowrap="nowrap"> </td> </tr> </table> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> <font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> Long-Lived Assets</font></div> </div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We review our long-lived assets, including patents, annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, then the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Fair value is determined by using cash flow analyses and other market valuations.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Income Taxes</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We account for income taxes in accordance with the asset and liability method of accounting for income taxes prescribed by ASC Topic 740. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income in the years in which those temporary differences are expected to be recovered or settled.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Revenue Recognition</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We recognize revenue when evidence exists that there is an arrangement between us and our customers, delivery of equipment sold or service has occurred, the selling price to our customers is fixed and determinable with required documentation, and collectability is reasonably assured. We recognize as deferred revenue, payments made in advance by customers for services not yet provided.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> When we enter into a multi-year contract with a customer to provide installation, network management, satellite transponder and help desk, or combination of these services, we recognize this revenue as services are performed and as equipment is sold. These agreements typically provide for additional fees, as needed, to be charged if on-site visits are required by the customer in order to ensure that each customer location is able to receive network communication. As these on-site visits are performed the associated revenue and cost are recognized in the period the work is completed. If we install, for an additional fee, new or replacement equipment to an immaterial number of new customer locations, and the equipment immediately becomes the property of the customer, the associated revenue and cost are recorded in the period in which the work is completed.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> In instances where we have entered into license agreements with a third parties to use our technology within their product offering, we recognize any base or prepaid revenues over the term of the agreement and any per occurrence or periodic usage revenues in the period they are earned.</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Research and Development</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Research and development costs are expensed when incurred. We expensed $464,847 and $1,021,414 of research and development costs for the three and six months ended June 30, 2012, respectively. We expensed $625,628 and $1,223,399 of research and development costs for the three and six months ended June 30, 2011, respectively.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Concentration of Credit Risk</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Financial instruments, which potentially subject us to concentration of credit risk, consist primarily of trade accounts receivable. In the normal course of business, we provide credit terms to our customers. Accordingly, we perform ongoing credit evaluations of our customers and maintain allowances for possible losses which, when realized, have been within the range of management's expectations.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> For the six months ended June 30, 2012 and 2011, we had the same customer that individually constituted 86% and 91%, of our total revenues, respectively. Although the contract for this customer has expired, we continue to provide services on a month to month basis during the time that the customer solicits requests for proposals ("RFP") from competing vendors. We are participating in the RFP process and have submitted our response to the customer.</div> <!--EndFragment--></div> </div>
-10530024
-5687889
111800
150000
40000
2000000
616000
250000
1900000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Note 14 - Subsequent Events</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> On July 13, 2012, we entered into a note and warrant purchase and security agreement with 7 investors and broke escrow on the initial funding under a convertible debt offering, the principal amount of which was $1,900,000, which included the conversion of $900,000 of previously issued short term debt.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> We evaluated subsequent events pursuant to ASC Topic 855 and have determined that there are no additional events that need to be reported.</div> <!--EndFragment--></div> </div>
51426719
55897169
0.94
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Accounts Receivable</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when collected.</div> <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 36pt"> Included in our $1,219,163 and $1,239,903 net accounts receivable for the six months ended June 30, 2012 and the year ended December 31, 2011, respectively, were (i) $1,184,804 and $1,269,579 for billed trade receivables, respectively; (ii) $80,625 and $23,814 of unbilled trade receivables (iii) $1,584 and $0 for employee travel advances and other receivables, respectively; less (iv) ($47,850) and ($53,490) for allowance for uncollectible accounts, respectively.</div> <!--EndFragment--></div> </div>
775000
23814
80625
404000
157400
222426
3101537
98263
1985280
681984
33756
128000
6335
160000
7919
2083543
729995
134335
167919
2955264
146273
278032
104042079
114128974
74916500
78516174
94167466
107193974
74916500
75576100
ISO4217:USD
ISO4217:USD
xbrli:shares
xbrli:shares
xbrli:pure
ISO4217:USD
bcst:warrants
0000740726
us-gaap:FinancingMember
2012-07-01
2012-07-13
0000740726
us-gaap:GeneralAndAdministrativeExpenseMember
2012-04-01
2012-06-30
0000740726
us-gaap:ResearchAndDevelopmentExpenseMember
2012-04-01
2012-06-30
0000740726
bcst:TelecommunicationsEquipmentMember
2012-04-01
2012-06-30
0000740726
bcst:BridgeLoanNotePayableMember
2012-04-01
2012-06-30
0000740726
bcst:UnsecuredConvertibleNoteMember
2012-04-01
2012-06-30
0000740726
us-gaap:CapitalLeaseObligationsMember
bcst:TelecommunicationsEquipmentMember
2012-04-01
2012-06-30
0000740726
2012-04-01
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
2012-04-01
2012-04-05
0000740726
bcst:TwoThousandTwelvePlanMember
us-gaap:MinimumMember
2012-03-25
2012-03-26
0000740726
bcst:TwoThousandTwelvePlanMember
us-gaap:MaximumMember
2012-03-25
2012-03-26
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:BridgeLoanConversionMember
bcst:BridgeLoanNotePayableMember
2012-03-25
2012-03-26
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:ConversionOfEquipmentPurchaseAndSaleAgreementToCommonStockAndWarrantsMember
bcst:EquipmentPurchaseAndSaleAgreementMember
2012-03-25
2012-03-26
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:EquipmentPurchaseAndSaleAgreementMember
2012-03-25
2012-03-26
0000740726
bcst:TwoThousandTwelvePlanMember
2012-03-25
2012-03-26
0000740726
us-gaap:GeneralAndAdministrativeExpenseMember
2012-01-01
2012-06-30
0000740726
us-gaap:ResearchAndDevelopmentExpenseMember
2012-01-01
2012-06-30
0000740726
us-gaap:RestrictedStockUnitsRSUMember
2012-01-01
2012-06-30
0000740726
bcst:TwoThousandTenPlanMember
bcst:PlacementAgencyAgreementWarrantsMember
2012-01-01
2012-06-30
0000740726
bcst:EquipmentPurchaseAgreementConversionMember
2012-01-01
2012-06-30
0000740726
bcst:StockOptionsAndWarrantsMember
2012-01-01
2012-06-30
0000740726
bcst:SharesIssuedToConsultantForServicesMember
2012-01-01
2012-06-30
0000740726
bcst:TelecommunicationsEquipmentMember
2012-01-01
2012-06-30
0000740726
bcst:AgencyMember
bcst:TwoThousandTwelvePlanMember
us-gaap:CommonStockMember
2012-01-01
2012-06-30
0000740726
bcst:InvestorsMember
bcst:TwoThousandTwelvePlanMember
us-gaap:CommonStockMember
2012-01-01
2012-06-30
0000740726
bcst:ConversionOfSeniorNotesToCommonStockMember
2012-01-01
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:EquipmentFinanceConversionMember
us-gaap:CommonStockMember
2012-01-01
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:BridgeLoanConversionMember
us-gaap:CommonStockMember
2012-01-01
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:AmendedAndRestatedSeniorConvertibleNoteMember
2012-01-01
2012-06-30
0000740726
bcst:WarrantsIssuedToResetProvisionAndExtendMaturityDateOfBridgeLoanWarrantsMember
2012-01-01
2012-06-30
0000740726
bcst:ConversionOfAccountsReceivablePurchaseAgreementsMember
us-gaap:WarrantMember
2012-01-01
2012-06-30
0000740726
bcst:ClassBWarrantMember
2012-01-01
2012-06-30
0000740726
bcst:ClassaWarrantMember
2012-01-01
2012-06-30
0000740726
bcst:BridgeLoanNotePayableMember
bcst:WarrantsIssuedToResetProvisionAndExtendMaturityDateOfBridgeLoanWarrantsMember
2012-01-01
2012-06-30
0000740726
bcst:BridgeLoanNotePayableMember
bcst:OriginalWarrantsIssuedForBridgeLoanMember
2012-01-01
2012-06-30
0000740726
bcst:BridgeLoanNotePayableMember
2012-01-01
2012-06-30
0000740726
bcst:UnsecuredConvertibleNoteMember
2012-01-01
2012-06-30
0000740726
bcst:AmendedAndRestatedSeniorConvertibleNoteMember
2012-01-01
2012-06-30
0000740726
bcst:RangeThreeMember
2012-01-01
2012-06-30
0000740726
bcst:RangeTwoMember
2012-01-01
2012-06-30
0000740726
bcst:RangeOneMember
2012-01-01
2012-06-30
0000740726
bcst:EmployeesMember
us-gaap:StockOptionsMember
2012-01-01
2012-06-30
0000740726
us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember
2012-01-01
2012-06-30
0000740726
us-gaap:CapitalLeaseObligationsMember
bcst:TelecommunicationsEquipmentMember
2012-01-01
2012-06-30
0000740726
us-gaap:DirectorMember
us-gaap:RestrictedStockUnitsRSUMember
2012-01-01
2012-06-30
0000740726
us-gaap:WarrantMember
2012-01-01
2012-06-30
0000740726
us-gaap:StockOptionsMember
2012-01-01
2012-06-30
0000740726
us-gaap:LetterOfCreditMember
2012-01-01
2012-06-30
0000740726
2012-01-01
2012-06-30
0000740726
bcst:EquipmentPurchaseAndSaleAgreementMember
2012-01-01
2012-03-31
0000740726
bcst:BridgeLoanNotePayableMember
bcst:WarrantsIssuedToResetProvisionAndExtendMaturityDateOfBridgeLoanWarrantsMember
2011-12-27
2011-12-28
0000740726
bcst:BridgeLoanNotePayableMember
bcst:OriginalWarrantsIssuedForBridgeLoanMember
2011-12-27
2011-12-28
0000740726
bcst:BridgeLoanNotePayableMember
2011-12-27
2011-12-28
0000740726
bcst:EquipmentPurchaseAndSaleAgreementMember
2011-10-01
2011-10-31
0000740726
us-gaap:GeneralAndAdministrativeExpenseMember
2011-04-01
2011-06-30
0000740726
us-gaap:ResearchAndDevelopmentExpenseMember
2011-04-01
2011-06-30
0000740726
bcst:TelecommunicationsEquipmentMember
2011-04-01
2011-06-30
0000740726
bcst:UnsecuredConvertibleNoteMember
2011-04-01
2011-06-30
0000740726
us-gaap:CapitalLeaseObligationsMember
bcst:TelecommunicationsEquipmentMember
2011-04-01
2011-06-30
0000740726
2011-04-01
2011-06-30
0000740726
bcst:ConversionOfShortTermDebtMember
2011-03-20
2011-03-21
0000740726
bcst:ModificationOfSeniorUnsecuredConvertibleNoteMember
2011-03-01
2011-03-31
0000740726
bcst:UnsecuredConvertibleNoteMember
bcst:WarrantIssuedForInterestOnConvertibleNoteMember
2011-03-01
2011-03-31
0000740726
bcst:UnsecuredConvertibleNoteMember
us-gaap:CommonStockMember
2011-03-01
2011-03-31
0000740726
bcst:UnsecuredConvertibleNoteMember
2011-03-01
2011-03-31
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:EquipmentPurchaseAndSaleAgreementMember
2011-01-01
2011-12-31
0000740726
us-gaap:GeneralAndAdministrativeExpenseMember
2011-01-01
2011-06-30
0000740726
bcst:NonemployeeInstallationTechniciansMember
us-gaap:StockOptionsMember
2011-01-01
2011-06-30
0000740726
bcst:ConsultingServicesProvidersMember
us-gaap:StockOptionsMember
2011-01-01
2011-06-30
0000740726
us-gaap:ResearchAndDevelopmentExpenseMember
2011-01-01
2011-06-30
0000740726
us-gaap:RestrictedStockUnitsRSUMember
2011-01-01
2011-06-30
0000740726
bcst:TwoThousandTenPlanMember
bcst:PlacementAgencyAgreementWarrantsMember
2011-01-01
2011-06-30
0000740726
bcst:TwoThousandTenPlanMember
bcst:WarrantsIssuedPursuantToWaiverAgreementMember
2011-01-01
2011-06-30
0000740726
bcst:TwoThousandTenPlanMember
2011-01-01
2011-06-30
0000740726
bcst:StockOptionsAndWarrantsMember
2011-01-01
2011-06-30
0000740726
bcst:OptionsGrantedForConsultingServicesMember
2011-01-01
2011-06-30
0000740726
bcst:InteractDevicesIncMember
2011-01-01
2011-06-30
0000740726
bcst:TelecommunicationsEquipmentMember
2011-01-01
2011-06-30
0000740726
bcst:ConversionOfAccountsReceivablePurchaseAgreementsMember
us-gaap:WarrantMember
2011-01-01
2011-06-30
0000740726
bcst:UnsecuredConvertibleNoteMember
2011-01-01
2011-06-30
0000740726
bcst:EmployeesMember
us-gaap:StockOptionsMember
2011-01-01
2011-06-30
0000740726
us-gaap:CapitalLeaseObligationsMember
bcst:TelecommunicationsEquipmentMember
2011-01-01
2011-06-30
0000740726
us-gaap:DirectorMember
us-gaap:RestrictedStockUnitsRSUMember
2011-01-01
2011-06-30
0000740726
us-gaap:WarrantMember
2011-01-01
2011-06-30
0000740726
us-gaap:StockOptionsMember
2011-01-01
2011-06-30
0000740726
2011-01-01
2011-06-30
0000740726
bcst:ConversionOfAccountsReceivablePurchaseAgreementsMember
us-gaap:AccountsReceivableMember
2011-01-01
2011-03-31
0000740726
bcst:UnsecuredConvertibleNoteMember
bcst:WarrantIssuedForInterestOnConvertibleNoteMember
2011-01-01
2011-03-31
0000740726
bcst:AmendedAndRestatedSeniorConvertibleNoteMember
2011-01-01
2011-03-31
0000740726
bcst:OptionsGrantedForConsultingServicesMember
2011-01-01
2011-01-31
0000740726
bcst:TwoThousandTenPlanMember
2010-12-22
2010-12-23
0000740726
bcst:UnsecuredConvertibleNoteMember
bcst:WarrantsIssuedForConvertibleNoteRestructuringMember
2010-12-22
2010-12-23
0000740726
bcst:UnsecuredConvertibleNoteMember
us-gaap:CommonStockMember
2010-12-22
2010-12-23
0000740726
bcst:AmendedAndRestatedSeniorConvertibleNoteMember
2010-12-22
2010-12-23
0000740726
us-gaap:SeniorNotesMember
us-gaap:CommonStockMember
2010-12-22
2010-12-23
0000740726
us-gaap:SeniorNotesMember
2010-12-22
2010-12-23
0000740726
us-gaap:SeniorNotesMember
bcst:WarrantsIssuedToSeniorSecuredNoteHolderMember
2010-07-29
2010-07-30
0000740726
bcst:AgreementTwoMember
2010-01-01
2010-12-31
0000740726
bcst:AgreementOneMember
2010-01-01
2010-12-31
0000740726
bcst:TwoThousandTenPlanMember
us-gaap:MinimumMember
2009-12-22
2009-12-23
0000740726
bcst:UnsecuredConvertibleNoteMember
2009-12-22
2009-12-23
0000740726
bcst:TelecommunicationsEquipmentMember
2009-07-27
2009-07-28
0000740726
us-gaap:SeniorNotesMember
bcst:WarrantsIssuedToThirdPartyForFinancingFeesMember
2007-01-01
2007-12-31
0000740726
bcst:InteractDevicesIncMember
2004-05-18
2012-06-30
0000740726
bcst:InteractDevicesIncMember
2004-05-01
2004-05-31
0000740726
2012-07-31
0000740726
us-gaap:RestrictedStockUnitsRSUMember
2012-06-30
0000740726
bcst:TwoThousandTenPlanMember
bcst:PlacementAgencyAgreementWarrantsMember
2012-06-30
0000740726
bcst:InteractDevicesIncMember
2012-06-30
0000740726
bcst:AgencyMember
bcst:TwoThousandTwelvePlanMember
bcst:ClassBWarrantMember
2012-06-30
0000740726
bcst:AgencyMember
bcst:TwoThousandTwelvePlanMember
bcst:ClassaWarrantMember
2012-06-30
0000740726
bcst:AgencyMember
bcst:TwoThousandTwelvePlanMember
2012-06-30
0000740726
bcst:InvestorsMember
bcst:TwoThousandTwelvePlanMember
bcst:ClassBWarrantMember
2012-06-30
0000740726
bcst:InvestorsMember
bcst:TwoThousandTwelvePlanMember
bcst:ClassaWarrantMember
2012-06-30
0000740726
bcst:InvestorsMember
bcst:TwoThousandTwelvePlanMember
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:PlacementAgencyAgreementWarrantsMember
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:EquipmentFinanceConversionMember
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:BridgeLoanConversionMember
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:ClassBWarrantMember
bcst:EquipmentFinanceConversionMember
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:ClassBWarrantMember
bcst:BridgeLoanConversionMember
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:ClassBWarrantMember
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:ClassaWarrantMember
bcst:EquipmentFinanceConversionMember
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:ClassaWarrantMember
bcst:BridgeLoanConversionMember
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:ClassaWarrantMember
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:AmendedAndRestatedSeniorConvertibleNoteMember
2012-06-30
0000740726
bcst:TwoThousandTwelvePlanMember
2012-06-30
0000740726
bcst:WarrantsIssuedToResetProvisionAndExtendMaturityDateOfBridgeLoanWarrantsMember
2012-06-30
0000740726
bcst:ConversionOfAccountsReceivablePurchaseAgreementsMember
us-gaap:WarrantMember
2012-06-30
0000740726
bcst:ClassBWarrantMember
2012-06-30
0000740726
bcst:ClassaWarrantMember
2012-06-30
0000740726
bcst:EquipmentPurchaseAndSaleAgreementMember
2012-06-30
0000740726
bcst:BridgeLoanNotePayableMember
bcst:WarrantsIssuedToResetProvisionAndExtendMaturityDateOfBridgeLoanWarrantsMember
2012-06-30
0000740726
bcst:BridgeLoanNotePayableMember
bcst:OriginalWarrantsIssuedForBridgeLoanMember
2012-06-30
0000740726
bcst:BridgeLoanNotePayableMember
2012-06-30
0000740726
bcst:UnsecuredConvertibleNoteMember
2012-06-30
0000740726
bcst:AmendedAndRestatedSeniorConvertibleNoteMember
2012-06-30
0000740726
bcst:RangeThreeMember
2012-06-30
0000740726
bcst:RangeTwoMember
2012-06-30
0000740726
bcst:RangeOneMember
2012-06-30
0000740726
us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember
2012-06-30
0000740726
us-gaap:FairValueInputsLevel3Member
us-gaap:FairValueMeasurementsRecurringMember
2012-06-30
0000740726
us-gaap:FairValueInputsLevel2Member
us-gaap:FairValueMeasurementsRecurringMember
2012-06-30
0000740726
us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember
2012-06-30
0000740726
us-gaap:EstimateOfFairValueFairValueDisclosureMember
us-gaap:FairValueMeasurementsRecurringMember
2012-06-30
0000740726
us-gaap:WarrantMember
2012-06-30
0000740726
us-gaap:StockOptionsMember
2012-06-30
0000740726
us-gaap:SalesRevenueServicesNetMember
us-gaap:CustomerConcentrationRiskMember
2012-06-30
0000740726
us-gaap:LetterOfCreditMember
2012-06-30
0000740726
2012-06-30
0000740726
bcst:EquipmentPurchaseAndSaleAgreementMember
2012-03-31
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:BridgeLoanConversionMember
bcst:BridgeLoanNotePayableMember
2012-03-26
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:ClassBWarrantMember
2012-03-26
0000740726
bcst:TwoThousandTwelvePlanMember
bcst:ClassaWarrantMember
2012-03-26
0000740726
us-gaap:RestrictedStockUnitsRSUMember
2011-12-31
0000740726
bcst:EquipmentPurchaseAndSaleAgreementMember
2011-12-31
0000740726
bcst:BridgeLoanNotePayableMember
2011-12-31
0000740726
bcst:UnsecuredConvertibleNoteMember
2011-12-31
0000740726
bcst:AmendedAndRestatedSeniorConvertibleNoteMember
2011-12-31
0000740726
us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember
2011-12-31
0000740726
2011-12-31
0000740726
bcst:BridgeLoanNotePayableMember
bcst:WarrantsIssuedToInvestmentBankerForPaymentMember
2011-12-28
0000740726
bcst:BridgeLoanNotePayableMember
bcst:OriginalWarrantsIssuedForBridgeLoanMember
2011-12-28
0000740726
bcst:BridgeLoanNotePayableMember
2011-12-28
0000740726
bcst:TwoThousandTenPlanMember
bcst:PlacementAgencyAgreementWarrantsMember
2011-06-30
0000740726
bcst:OptionsGrantedForConsultingServicesMember
2011-06-30
0000740726
bcst:ConversionOfAccountsReceivablePurchaseAgreementsMember
us-gaap:WarrantMember
2011-06-30
0000740726
bcst:UnsecuredConvertibleNoteMember
2011-06-30
0000740726
us-gaap:SalesRevenueServicesNetMember
us-gaap:CustomerConcentrationRiskMember
2011-06-30
0000740726
2011-06-30
0000740726
bcst:WarrantsIssuedPursuantToWaiverAgreementMember
2011-03-31
0000740726
bcst:ModificationOfSeniorUnsecuredConvertibleNoteMember
2011-03-31
0000740726
bcst:UnsecuredConvertibleNoteMember
bcst:WarrantIssuedForInterestOnConvertibleNoteMember
2011-03-31
0000740726
bcst:AmendedAndRestatedSeniorConvertibleNoteMember
2011-03-31
0000740726
bcst:ConversionOfShortTermDebtMember
2011-03-21
0000740726
bcst:UnsecuredConvertibleNoteMember
bcst:WarrantIssuedForInterestOnConvertibleNoteMember
2010-12-31
0000740726
us-gaap:AccountsReceivableMember
2010-12-31
0000740726
2010-12-31
0000740726
bcst:TwoThousandTenPlanMember
2010-12-23
0000740726
bcst:UnsecuredConvertibleNoteMember
bcst:WarrantsIssuedForConvertibleNoteRestructuringMember
2010-12-23
0000740726
bcst:AmendedAndRestatedSeniorConvertibleNoteMember
2010-12-23
0000740726
bcst:TwoThousandTenPlanMember
bcst:TwoThousandTenBridgeLoanMember
2010-11-29
0000740726
us-gaap:SeniorNotesMember
bcst:WarrantsIssuedToSeniorSecuredNoteHolderMember
2010-07-30
0000740726
us-gaap:SeniorNotesMember
2010-07-30
0000740726
bcst:UnsecuredConvertibleNoteMember
2009-12-23
0000740726
bcst:TelecommunicationsEquipmentMember
2009-07-28
0000740726
bcst:UnsecuredConvertibleNoteMember
2006-11-02
See Note 6 for additional discussion.
See Note 6 for additional discussion.
See Note 6 for additional discussion.
See Note 6 for additional discussion.