11.  SUBSEQUENT EVENTS:

In October 2013, the Company initiated a follow-on Series D Preferred stock offering to sell the remaining 772,352 units at $3.00 per unit for up to $2,317,056 gross proceeds. The offering includes an over-allotment of 1,000,000 units for an additional $3,000,000 in potential gross proceeds. If we successfully complete this transaction, we believe the proceeds we will receive will be sufficient to fund our operations, including our expected capital expenditures, through at least June 2014, or at least the next twelve months if all of the over-allotment units are sold.  Each unit consists of one share of Series D Preferred Stock and one-half warrant. One warrant entitles the holder to purchase one share of the Company’s common stock. The Company has agreed to file a registration statement within 90 days following the completion of this offering to register the common shares to be issued upon exercise of the warrants.  The Company also granted similar registration rights to the holders of common stock to be issued upon exercise of the warrants issued in the prior offering of Series D Preferred shares and warrants which closed on August 30, 2013.  As of November 6, 2013 there were no Series D Preferred stock issuances subsequent to the September 30, 2013 reporting date.

As of November 6, 2013; 25,022 Series B preferred shares were converted into a total of 25,022 common shares subsequent to September 30, 2013.  As of November 6, 2013 there were 8,072,000 common shares outstanding.

On October 15, 2013 the Company made the required principal payment of $250,000 on the Senior Subordinated note payable.  As of November 6, 2013 the current senior subordinated note payable is $750,000.  See Note 5 Notes Payable for further discussion.