On August 11, 2011, the Company entered
into a Purchase Money Promissory Note and Security Agreement in the amount of $212,813. The loan bears interest at a rate of 6%
per annum, is secured by all the assets of the Company and matures on August 11, 2016. Pursuant to the terms of the agreement,
the Company is required to make semi-annual interest only payments in the amount of $6,385 beginning on March 31, 2012 with the
unpaid principal and accrued interest due at maturity on August 11, 2016. In addition, the agreement provides for one ninety-day
extension at maturity upon the option of the holder. As of August 31, 2012 and August 31, 2011, the principal balance totaled $212,813
and accrued interest was $13,560 and $548, respectively.