10.  SUBSEQUENT EVENTS:

On June 21, 2013, the Company offered 1,500,000 units at $3.00 per unit for potential total proceeds of $4,500,000.  As of August 6, 2013 we have issued 317,830 shares, and warrants to purchase 158,915 shares of common stock for total gross proceeds of $953,490 discussed further in Note 6 Stockholders’ Equity.

On July 25, 2013, the Company signed an extension of 6 months for the lease of the corporate headquarters office space, extending the lease term to February 28, 2014.  The new six month lease commitment is approximately $19,000.

On July 15, 2013 the company paid approximately $61,000 to the manufacturer for equipment disclosed in Note 8 Commitments and Contingencies.  The Company’s current commitment to its manufacturer is $133,000.

As of August 6 2013; 43,000 Series A preferred shares, 461,559 Series B preferred shares and 199,000 Series C preferred shares were converted into a total of 961,559 common shares subsequent to June 30, 2013. Dividends of $23,466 were paid upon the conversion of Series C preferred shares to common shares subsequent to the June 30, 2013 reporting date.  As of August 6, 2013 there were 7,990,956 common shares outstanding.