1, 2012 the Company completed a sale leaseback transaction of certain equipment for $304,879 in accordance Accounting Standard
Codification (ASC) 840 40 Sales-Leaseback Transactions, the gain was deferred. The lease was accounted
for as a capitalized lease, a financing method, with monthly payments of $22,200 through November, 2014. The proceeds from the
sale where used to repay the debt on the equipment, see note 4 June 19, 2012 above. The Company will continue to reflect the book
value of the equipment and related accumulated depreciation remain on the balance sheet and no sale was recognized. The sales price
of the equipment is recorded as a capitalized lease obligation with a portion of each lease payment includes interest expense.