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Zyto Corp – ‘10-Q’ for 3/31/12 – ‘EX-101.INS’

On:  Tuesday, 5/15/12, at 3:04pm ET   ·   For:  3/31/12   ·   Accession #:  1096906-12-1424   ·   File #:  0-54170

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 5/15/12  Zyto Corp                         10-Q        3/31/12   32:1.6M                                   Southridge Svcs Inc/FA

Quarterly Report   —   Form 10-Q   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Zyto Corp. 10Q 2012-03-31                           HTML    297K 
 2: EX-31.1     Certification of Chief Executive Officer of Zyto    HTML     19K 
                Corp, Pursuant to Section 302 of the                             
                Sarbanes-Oxley Act of 2002.                                      
 3: EX-31.2     Certification of Chief Financial Officer of Zyto    HTML     18K 
                Corp, Pursuant to Section 302 of the                             
                Sarbanes-Oxley Act of 2002.                                      
 4: EX-32.1     Certification of Chief Executive Officer of Zyto    HTML     15K 
                Corp, Pursuant to 18 U.S.C Section 1350, as                      
                Adopted Pursuant to Section 906 of the                           
                Sarbanes-Oxley Act of 2002.                                      
 5: EX-32.2     Certification of Chief Financial Officer of Zyto    HTML     14K 
                Corp, Pursuant to 18 U.S.C Section 1350, as                      
                Adopted Pursuant to Section 906 of the                           
                Sarbanes-Oxley Act of 2002.                                      
20: R1          Document and Entity Information                     HTML     38K 
15: R2          Condensed Consolidated Balance Sheets               HTML    111K 
18: R3          Condensed Balance Sheets Parenthetical              HTML     36K 
22: R4          Condensed Consolidated Statements of Operations     HTML     65K 
30: R5          Condensed Consolidated Statements of Cash Flows     HTML    103K 
16: R6          Organization and Business Activity                  HTML     27K 
17: R7          Summary of Significant Accounting Policies          HTML     35K 
14: R8          Inventory                                           HTML     21K 
12: R9          Property and Equipment                              HTML     30K 
31: R10         Line of Credit                                      HTML     17K 
24: R11         Notes Payable                                       HTML     27K 
23: R12         Related Party Note Payable                          HTML     29K 
27: R13         Research and Development                            HTML     25K 
28: R14         Commitments and Contingencies                       HTML     21K 
25: R15         Capital Lease                                       HTML     24K 
29: R16         Equity                                              HTML     27K 
19: R17         Stock Options                                       HTML     41K 
21: R18         Concentrations                                      HTML     19K 
32: XML         IDEA XML File -- Filing Summary                      XML     40K 
13: EXCEL       IDEA Workbook of Financial Reports (.xls)            XLS    153K 
 6: EX-101.INS  XBRL Instance -- zytc-20120331                       XML    210K 
 8: EX-101.CAL  XBRL Calculations -- zytc-20120331_cal               XML     25K 
 9: EX-101.DEF  XBRL Definitions -- zytc-20120331_def                XML    132K 
10: EX-101.LAB  XBRL Labels -- zytc-20120331_lab                     XML    244K 
11: EX-101.PRE  XBRL Presentations -- zytc-20120331_pre              XML    172K 
 7: EX-101.SCH  XBRL Schema -- zytc-20120331                         XSD     43K 
26: ZIP         XBRL Zipped Folder -- 0001096906-12-001424-xbrl      Zip     33K

‘EX-101.INS’   —   XBRL Instance — zytc-20120331

This Exhibit is an XBRL XML File.

                                                                                                                                                                                
<?xml version="1.0" encoding="windows-1252"?>
<!-- Produced by Southridge Services using EDGARsuite software, Advanced Computer Innovations, Inc., Copyright (C) 2008-2012. www.edgarsuite.com -->
<xbrl xmlns:dei="http://xbrl.sec.gov/dei/2012-01-31" xmlns:fil="http://zytcxbrl.com/20120331" xmlns="http://www.xbrl.org/2003/instance" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:xlink="http://www.w3.org/1999/xlink" xmlns:link="http://www.xbrl.org/2003/linkbase" xmlns:xbrli="http://www.xbrl.org/2003/instance" xmlns:us-gaap="http://fasb.org/us-gaap/2012-01-31" xmlns:iso4217="http://www.xbrl.org/2003/iso4217" xmlns:num="http://www.xbrl.org/dtr/type/numeric" xmlns:nonnum="http://www.xbrl.org/dtr/type/non-numeric" xmlns:xbrldi="http://xbrl.org/2006/xbrldi">
<link:schemaRef xlink:type="simple" xlink:href="zytc-20120331.xsd"/>
<dei:DocumentType contextRef="Y12Q1"> 10-Q </dei:DocumentType>
<dei:DocumentPeriodEndDate contextRef="Y12Q1"> 2012-03-31 </dei:DocumentPeriodEndDate>
<dei:AmendmentFlag contextRef="Y12Q1"> false </dei:AmendmentFlag>
<dei:EntityRegistrantName contextRef="Y12Q1"> ZYTO CORP </dei:EntityRegistrantName>
<dei:EntityCentralIndexKey contextRef="Y12Q1"> 0001406796 </dei:EntityCentralIndexKey>
<dei:CurrentFiscalYearEndDate contextRef="Y12Q1"> --12-31 </dei:CurrentFiscalYearEndDate>
<dei:EntityFilerCategory contextRef="Y12Q1"> Smaller Reporting Company </dei:EntityFilerCategory>
<dei:EntityCurrentReportingStatus contextRef="Y12Q1"> Yes </dei:EntityCurrentReportingStatus>
<dei:EntityVoluntaryFilers contextRef="Y12Q1"> No </dei:EntityVoluntaryFilers>
<dei:EntityWellKnownSeasonedIssuer contextRef="Y12Q1"> No </dei:EntityWellKnownSeasonedIssuer>
<dei:DocumentFiscalYearFocus contextRef="Y12Q1"> 2012 </dei:DocumentFiscalYearFocus>
<dei:DocumentFiscalPeriodFocus contextRef="Y12Q1"> Q1 </dei:DocumentFiscalPeriodFocus>
<us-gaap:CashAndCashEquivalentsAtCarryingValue unitRef="USD" contextRef="E12Q1" decimals="INF"> 99119 </us-gaap:CashAndCashEquivalentsAtCarryingValue>
<us-gaap:CashAndCashEquivalentsAtCarryingValue unitRef="USD" contextRef="E11" decimals="INF"> 87364 </us-gaap:CashAndCashEquivalentsAtCarryingValue>
<us-gaap:AccountsReceivableNetCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 255688 </us-gaap:AccountsReceivableNetCurrent>
<us-gaap:AccountsReceivableNetCurrent unitRef="USD" contextRef="E11" decimals="INF"> 217712 </us-gaap:AccountsReceivableNetCurrent>
<us-gaap:PrepaidExpenseCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 67310 </us-gaap:PrepaidExpenseCurrent>
<us-gaap:PrepaidExpenseCurrent unitRef="USD" contextRef="E11" decimals="INF"> 32245 </us-gaap:PrepaidExpenseCurrent>
<us-gaap:InventoryNet unitRef="USD" contextRef="E12Q1" decimals="INF"> 30840 </us-gaap:InventoryNet>
<us-gaap:InventoryNet unitRef="USD" contextRef="E11" decimals="INF"> 17558 </us-gaap:InventoryNet>
<us-gaap:OtherAssetsCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 7525 </us-gaap:OtherAssetsCurrent>
<us-gaap:OtherAssetsCurrent unitRef="USD" contextRef="E11" decimals="INF"> 7525 </us-gaap:OtherAssetsCurrent>
<us-gaap:AssetsCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 460482 </us-gaap:AssetsCurrent>
<us-gaap:AssetsCurrent unitRef="USD" contextRef="E11" decimals="INF"> 362404 </us-gaap:AssetsCurrent>
<us-gaap:AccountsReceivableNetNoncurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 145027 </us-gaap:AccountsReceivableNetNoncurrent>
<us-gaap:AccountsReceivableNetNoncurrent unitRef="USD" contextRef="E11" decimals="INF"> 117647 </us-gaap:AccountsReceivableNetNoncurrent>
<us-gaap:PropertyPlantAndEquipmentNet unitRef="USD" contextRef="E12Q1" decimals="INF"> 121667 </us-gaap:PropertyPlantAndEquipmentNet>
<us-gaap:PropertyPlantAndEquipmentNet unitRef="USD" contextRef="E11" decimals="INF"> 132693 </us-gaap:PropertyPlantAndEquipmentNet>
<us-gaap:FiniteLivedIntangibleAssetsNet unitRef="USD" contextRef="E12Q1" decimals="INF"> 338713 </us-gaap:FiniteLivedIntangibleAssetsNet>
<us-gaap:FiniteLivedIntangibleAssetsNet unitRef="USD" contextRef="E11" decimals="INF"> 317581 </us-gaap:FiniteLivedIntangibleAssetsNet>
<us-gaap:Assets unitRef="USD" contextRef="E12Q1" decimals="INF"> 1065889 </us-gaap:Assets>
<us-gaap:Assets unitRef="USD" contextRef="E11" decimals="INF"> 930325 </us-gaap:Assets>
<us-gaap:AccountsPayableCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 421658 </us-gaap:AccountsPayableCurrent>
<us-gaap:AccountsPayableCurrent unitRef="USD" contextRef="E11" decimals="INF"> 488967 </us-gaap:AccountsPayableCurrent>
<us-gaap:AccruedLiabilitiesCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 199954 </us-gaap:AccruedLiabilitiesCurrent>
<us-gaap:AccruedLiabilitiesCurrent unitRef="USD" contextRef="E11" decimals="INF"> 178121 </us-gaap:AccruedLiabilitiesCurrent>
<us-gaap:InterestPayableCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 444383 </us-gaap:InterestPayableCurrent>
<us-gaap:InterestPayableCurrent unitRef="USD" contextRef="E11" decimals="INF"> 406003 </us-gaap:InterestPayableCurrent>
<us-gaap:LinesOfCreditCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 100000 </us-gaap:LinesOfCreditCurrent>
<us-gaap:LinesOfCreditCurrent unitRef="USD" contextRef="E11" decimals="INF"> 100000 </us-gaap:LinesOfCreditCurrent>
<us-gaap:NotesPayableCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 96942 </us-gaap:NotesPayableCurrent>
<us-gaap:NotesPayableCurrent unitRef="USD" contextRef="E11" decimals="INF"> 96942 </us-gaap:NotesPayableCurrent>
<us-gaap:DeferredRevenueCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 143419 </us-gaap:DeferredRevenueCurrent>
<us-gaap:DeferredRevenueCurrent unitRef="USD" contextRef="E11" decimals="INF"> 104927 </us-gaap:DeferredRevenueCurrent>
<us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 4296 </us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent>
<us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent unitRef="USD" contextRef="E11" decimals="INF"> 4296 </us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent>
<us-gaap:LiabilitiesCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 1410652 </us-gaap:LiabilitiesCurrent>
<us-gaap:LiabilitiesCurrent unitRef="USD" contextRef="E11" decimals="INF"> 1379256 </us-gaap:LiabilitiesCurrent>
<us-gaap:ProductWarrantyAccrualNoncurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 8476 </us-gaap:ProductWarrantyAccrualNoncurrent>
<us-gaap:ProductWarrantyAccrualNoncurrent unitRef="USD" contextRef="E11" decimals="INF"> 8476 </us-gaap:ProductWarrantyAccrualNoncurrent>
<us-gaap:NotesPayableRelatedPartiesNoncurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 2403430 </us-gaap:NotesPayableRelatedPartiesNoncurrent>
<us-gaap:NotesPayableRelatedPartiesNoncurrent unitRef="USD" contextRef="E11" decimals="INF"> 2371241 </us-gaap:NotesPayableRelatedPartiesNoncurrent>
<us-gaap:CapitalLeaseObligationsNoncurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 6854 </us-gaap:CapitalLeaseObligationsNoncurrent>
<us-gaap:CapitalLeaseObligationsNoncurrent unitRef="USD" contextRef="E11" decimals="INF"> 9522 </us-gaap:CapitalLeaseObligationsNoncurrent>
<us-gaap:Liabilities unitRef="USD" contextRef="E12Q1" decimals="INF"> 3829412 </us-gaap:Liabilities>
<us-gaap:Liabilities unitRef="USD" contextRef="E11" decimals="INF"> 3768495 </us-gaap:Liabilities>
<us-gaap:CommonStockValue unitRef="USD" contextRef="E12Q1" decimals="INF"> 3486 </us-gaap:CommonStockValue>
<us-gaap:CommonStockValue unitRef="USD" contextRef="E11" decimals="INF"> 3486 </us-gaap:CommonStockValue>
<us-gaap:AdditionalPaidInCapitalCommonStock unitRef="USD" contextRef="E12Q1" decimals="INF"> 5276589 </us-gaap:AdditionalPaidInCapitalCommonStock>
<us-gaap:AdditionalPaidInCapitalCommonStock unitRef="USD" contextRef="E11" decimals="INF"> 5267765 </us-gaap:AdditionalPaidInCapitalCommonStock>
<us-gaap:CommonStockShareSubscribedButUnissuedSubscriptionsReceivable unitRef="USD" contextRef="E12Q1" decimals="INF"> 2000 </us-gaap:CommonStockShareSubscribedButUnissuedSubscriptionsReceivable>
<us-gaap:CommonStockShareSubscribedButUnissuedSubscriptionsReceivable unitRef="USD" contextRef="E11" decimals="INF"> 2000 </us-gaap:CommonStockShareSubscribedButUnissuedSubscriptionsReceivable>
<us-gaap:RetainedEarningsAccumulatedDeficit unitRef="USD" contextRef="E12Q1" decimals="INF"> -8041598 </us-gaap:RetainedEarningsAccumulatedDeficit>
<us-gaap:RetainedEarningsAccumulatedDeficit unitRef="USD" contextRef="E11" decimals="INF"> -8107421 </us-gaap:RetainedEarningsAccumulatedDeficit>
<us-gaap:StockholdersEquity unitRef="USD" contextRef="E12Q1" decimals="INF"> -2763523 </us-gaap:StockholdersEquity>
<us-gaap:StockholdersEquity unitRef="USD" contextRef="E11" decimals="INF"> -2838170 </us-gaap:StockholdersEquity>
<us-gaap:LiabilitiesAndStockholdersEquity unitRef="USD" contextRef="E12Q1" decimals="INF"> 1065889 </us-gaap:LiabilitiesAndStockholdersEquity>
<us-gaap:LiabilitiesAndStockholdersEquity unitRef="USD" contextRef="E11" decimals="INF"> 930325 </us-gaap:LiabilitiesAndStockholdersEquity>
<us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 82007 </us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent>
<us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent unitRef="USD" contextRef="E11" decimals="INF"> 115633 </us-gaap:AllowanceForDoubtfulAccountsReceivableCurrent>
<us-gaap:AllowanceForDoubtfulAccountsReceivableNoncurrent unitRef="USD" contextRef="E12Q1" decimals="INF"> 46696 </us-gaap:AllowanceForDoubtfulAccountsReceivableNoncurrent>
<us-gaap:AllowanceForDoubtfulAccountsReceivableNoncurrent unitRef="USD" contextRef="E11" decimals="INF"> 13071 </us-gaap:AllowanceForDoubtfulAccountsReceivableNoncurrent>
<us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment unitRef="USD" contextRef="E12Q1" decimals="INF"> 276603 </us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment>
<us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment unitRef="USD" contextRef="E11" decimals="INF"> 259747 </us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment>
<us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization unitRef="USD" contextRef="E12Q1" decimals="INF"> 148721 </us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization>
<us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization unitRef="USD" contextRef="E11" decimals="INF"> 109650 </us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization>
<us-gaap:CommonStockParOrStatedValuePerShare unitRef="UsdPerShare" contextRef="E12Q1" decimals="4"> 0.0001 </us-gaap:CommonStockParOrStatedValuePerShare>
<us-gaap:CommonStockParOrStatedValuePerShare unitRef="UsdPerShare" contextRef="E11" decimals="4"> 0.0001 </us-gaap:CommonStockParOrStatedValuePerShare>
<us-gaap:CommonStockSharesAuthorized unitRef="Shares" contextRef="E12Q1" decimals="INF"> 200000000 </us-gaap:CommonStockSharesAuthorized>
<us-gaap:CommonStockSharesAuthorized unitRef="Shares" contextRef="E11" decimals="INF"> 200000000 </us-gaap:CommonStockSharesAuthorized>
<us-gaap:CommonStockSharesIssued unitRef="Shares" contextRef="E12Q1" decimals="INF"> 34857543 </us-gaap:CommonStockSharesIssued>
<us-gaap:CommonStockSharesIssued unitRef="Shares" contextRef="E11" decimals="INF"> 34857543 </us-gaap:CommonStockSharesIssued>
<us-gaap:CommonStockSharesOutstanding unitRef="Shares" contextRef="E12Q1" decimals="INF"> 34857543 </us-gaap:CommonStockSharesOutstanding>
<us-gaap:CommonStockSharesOutstanding unitRef="Shares" contextRef="E11" decimals="INF"> 34857543 </us-gaap:CommonStockSharesOutstanding>
<us-gaap:SalesRevenueNet unitRef="USD" contextRef="Y12Q1" decimals="INF"> 1086580 </us-gaap:SalesRevenueNet>
<us-gaap:SalesRevenueNet unitRef="USD" contextRef="Y11Q1" decimals="INF"> 808114 </us-gaap:SalesRevenueNet>
<us-gaap:CostOfRevenue unitRef="USD" contextRef="Y12Q1" decimals="INF"> 41181 </us-gaap:CostOfRevenue>
<us-gaap:CostOfRevenue unitRef="USD" contextRef="Y11Q1" decimals="INF"> 69836 </us-gaap:CostOfRevenue>
<us-gaap:GrossProfit unitRef="USD" contextRef="Y12Q1" decimals="INF"> 1045399 </us-gaap:GrossProfit>
<us-gaap:GrossProfit unitRef="USD" contextRef="Y11Q1" decimals="INF"> 738278 </us-gaap:GrossProfit>
<us-gaap:SellingAndMarketingExpense unitRef="USD" contextRef="Y12Q1" decimals="INF"> 343703 </us-gaap:SellingAndMarketingExpense>
<us-gaap:SellingAndMarketingExpense unitRef="USD" contextRef="Y11Q1" decimals="INF"> 455353 </us-gaap:SellingAndMarketingExpense>
<us-gaap:GeneralAndAdministrativeExpense unitRef="USD" contextRef="Y12Q1" decimals="INF"> 552529 </us-gaap:GeneralAndAdministrativeExpense>
<us-gaap:GeneralAndAdministrativeExpense unitRef="USD" contextRef="Y11Q1" decimals="INF"> 489504 </us-gaap:GeneralAndAdministrativeExpense>
<us-gaap:ResearchAndDevelopmentExpense unitRef="USD" contextRef="Y12Q1" decimals="INF"> 58884 </us-gaap:ResearchAndDevelopmentExpense>
<us-gaap:ResearchAndDevelopmentExpense unitRef="USD" contextRef="Y11Q1" decimals="INF"> 38397 </us-gaap:ResearchAndDevelopmentExpense>
<us-gaap:OperatingExpenses unitRef="USD" contextRef="Y12Q1" decimals="INF"> 955116 </us-gaap:OperatingExpenses>
<us-gaap:OperatingExpenses unitRef="USD" contextRef="Y11Q1" decimals="INF"> 983254 </us-gaap:OperatingExpenses>
<us-gaap:OperatingIncomeLoss unitRef="USD" contextRef="Y12Q1" decimals="INF"> 90283 </us-gaap:OperatingIncomeLoss>
<us-gaap:OperatingIncomeLoss unitRef="USD" contextRef="Y11Q1" decimals="INF"> -244976 </us-gaap:OperatingIncomeLoss>
<us-gaap:OtherIncome unitRef="USD" contextRef="Y12Q1" decimals="INF"> 66897 </us-gaap:OtherIncome>
<us-gaap:InterestExpenseDebt unitRef="USD" contextRef="Y12Q1" decimals="INF"> 91357 </us-gaap:InterestExpenseDebt>
<us-gaap:InterestExpenseDebt unitRef="USD" contextRef="Y11Q1" decimals="INF"> 86176 </us-gaap:InterestExpenseDebt>
<us-gaap:NonoperatingIncomeExpense unitRef="USD" contextRef="Y12Q1" decimals="INF"> -24460 </us-gaap:NonoperatingIncomeExpense>
<us-gaap:NonoperatingIncomeExpense unitRef="USD" contextRef="Y11Q1" decimals="INF"> -86176 </us-gaap:NonoperatingIncomeExpense>
<us-gaap:NetIncomeLoss unitRef="USD" contextRef="Y12Q1" decimals="INF"> 65823 </us-gaap:NetIncomeLoss>
<us-gaap:NetIncomeLoss unitRef="USD" contextRef="Y11Q1" decimals="INF"> -331152 </us-gaap:NetIncomeLoss>
<us-gaap:DepreciationDepletionAndAmortization unitRef="USD" contextRef="Y12Q1" decimals="INF"> 55927 </us-gaap:DepreciationDepletionAndAmortization>
<us-gaap:DepreciationDepletionAndAmortization unitRef="USD" contextRef="Y11Q1" decimals="INF"> 39795 </us-gaap:DepreciationDepletionAndAmortization>
<us-gaap:AmortizationOfDebtDiscountPremium unitRef="USD" contextRef="Y12Q1" decimals="INF"> 32190 </us-gaap:AmortizationOfDebtDiscountPremium>
<us-gaap:AmortizationOfDebtDiscountPremium unitRef="USD" contextRef="Y11Q1" decimals="INF"> 32190 </us-gaap:AmortizationOfDebtDiscountPremium>
<us-gaap:ProvisionForDoubtfulAccounts unitRef="USD" contextRef="Y11Q1" decimals="INF"> 13544 </us-gaap:ProvisionForDoubtfulAccounts>
<us-gaap:ShareBasedCompensation unitRef="USD" contextRef="Y12Q1" decimals="INF"> 8824 </us-gaap:ShareBasedCompensation>
<us-gaap:ShareBasedGoodsAndNonemployeeServicesTransactionStockholdersEquity unitRef="USD" contextRef="Y11Q1" decimals="INF"> 41789 </us-gaap:ShareBasedGoodsAndNonemployeeServicesTransactionStockholdersEquity>
<fil:IssuanceOfCommonStockInConnectionWithDebt unitRef="USD" contextRef="Y11Q1" decimals="INF"> 2251 </fil:IssuanceOfCommonStockInConnectionWithDebt>
<us-gaap:IncreaseDecreaseInAccountsReceivable unitRef="USD" contextRef="Y12Q1" decimals="INF"> 65357 </us-gaap:IncreaseDecreaseInAccountsReceivable>
<us-gaap:IncreaseDecreaseInAccountsReceivable unitRef="USD" contextRef="Y11Q1" decimals="INF"> -50698 </us-gaap:IncreaseDecreaseInAccountsReceivable>
<us-gaap:IncreaseDecreaseInInventories unitRef="USD" contextRef="Y12Q1" decimals="INF"> 13282 </us-gaap:IncreaseDecreaseInInventories>
<us-gaap:IncreaseDecreaseInInventories unitRef="USD" contextRef="Y11Q1" decimals="INF"> -8767 </us-gaap:IncreaseDecreaseInInventories>
<us-gaap:IncreaseDecreaseInPrepaidExpense unitRef="USD" contextRef="Y12Q1" decimals="INF"> 35065 </us-gaap:IncreaseDecreaseInPrepaidExpense>
<us-gaap:IncreaseDecreaseInPrepaidExpense unitRef="USD" contextRef="Y11Q1" decimals="INF"> 10710 </us-gaap:IncreaseDecreaseInPrepaidExpense>
<us-gaap:IncreaseDecreaseInAccountsPayable unitRef="USD" contextRef="Y12Q1" decimals="INF"> -67309 </us-gaap:IncreaseDecreaseInAccountsPayable>
<us-gaap:IncreaseDecreaseInAccountsPayable unitRef="USD" contextRef="Y11Q1" decimals="INF"> 85107 </us-gaap:IncreaseDecreaseInAccountsPayable>
<us-gaap:IncreaseDecreaseInOtherAccruedLiabilities unitRef="USD" contextRef="Y12Q1" decimals="INF"> 21833 </us-gaap:IncreaseDecreaseInOtherAccruedLiabilities>
<us-gaap:IncreaseDecreaseInOtherAccruedLiabilities unitRef="USD" contextRef="Y11Q1" decimals="INF"> 29223 </us-gaap:IncreaseDecreaseInOtherAccruedLiabilities>
<us-gaap:IncreaseDecreaseInInterestPayableNet unitRef="USD" contextRef="Y12Q1" decimals="INF"> 38380 </us-gaap:IncreaseDecreaseInInterestPayableNet>
<us-gaap:IncreaseDecreaseInInterestPayableNet unitRef="USD" contextRef="Y11Q1" decimals="INF"> 7774 </us-gaap:IncreaseDecreaseInInterestPayableNet>
<us-gaap:IncreaseDecreaseInDeferredRevenue unitRef="USD" contextRef="Y12Q1" decimals="INF"> 38492 </us-gaap:IncreaseDecreaseInDeferredRevenue>
<us-gaap:IncreaseDecreaseInDeferredRevenue unitRef="USD" contextRef="Y11Q1" decimals="INF"> 10734 </us-gaap:IncreaseDecreaseInDeferredRevenue>
<us-gaap:NetCashProvidedByUsedInOperatingActivities unitRef="USD" contextRef="Y12Q1" decimals="INF"> 80456 </us-gaap:NetCashProvidedByUsedInOperatingActivities>
<us-gaap:NetCashProvidedByUsedInOperatingActivities unitRef="USD" contextRef="Y11Q1" decimals="INF"> -19990 </us-gaap:NetCashProvidedByUsedInOperatingActivities>
<us-gaap:PaymentsToAcquireMachineryAndEquipment unitRef="USD" contextRef="Y12Q1" decimals="INF"> 5830 </us-gaap:PaymentsToAcquireMachineryAndEquipment>
<us-gaap:PaymentsToAcquireMachineryAndEquipment unitRef="USD" contextRef="Y11Q1" decimals="INF"> 12575 </us-gaap:PaymentsToAcquireMachineryAndEquipment>
<us-gaap:ResearchAndDevelopmentExpenseSoftwareExcludingAcquiredInProcessCost unitRef="USD" contextRef="Y12Q1" decimals="INF"> -60203 </us-gaap:ResearchAndDevelopmentExpenseSoftwareExcludingAcquiredInProcessCost>
<us-gaap:ResearchAndDevelopmentExpenseSoftwareExcludingAcquiredInProcessCost unitRef="USD" contextRef="Y11Q1" decimals="INF"> -45260 </us-gaap:ResearchAndDevelopmentExpenseSoftwareExcludingAcquiredInProcessCost>
<us-gaap:NetCashProvidedByUsedInInvestingActivities unitRef="USD" contextRef="Y12Q1" decimals="INF"> -66033 </us-gaap:NetCashProvidedByUsedInInvestingActivities>
<us-gaap:NetCashProvidedByUsedInInvestingActivities unitRef="USD" contextRef="Y11Q1" decimals="INF"> -57835 </us-gaap:NetCashProvidedByUsedInInvestingActivities>
<us-gaap:RepaymentsOfNotesPayable unitRef="USD" contextRef="Y12Q1" decimals="INF"> 2668 </us-gaap:RepaymentsOfNotesPayable>
<us-gaap:RepaymentsOfNotesPayable unitRef="USD" contextRef="Y11Q1" decimals="INF"> 420 </us-gaap:RepaymentsOfNotesPayable>
<us-gaap:RepaymentsOfLongTermLinesOfCredit unitRef="USD" contextRef="Y11Q1" decimals="INF"> 11000 </us-gaap:RepaymentsOfLongTermLinesOfCredit>
<us-gaap:ProceedsFromNotesPayable unitRef="USD" contextRef="Y11Q1" decimals="INF"> -50000 </us-gaap:ProceedsFromNotesPayable>
<us-gaap:NetCashProvidedByUsedInFinancingActivities unitRef="USD" contextRef="Y12Q1" decimals="INF"> -2668 </us-gaap:NetCashProvidedByUsedInFinancingActivities>
<us-gaap:NetCashProvidedByUsedInFinancingActivities unitRef="USD" contextRef="Y11Q1" decimals="INF"> 38580 </us-gaap:NetCashProvidedByUsedInFinancingActivities>
<us-gaap:CashAndCashEquivalentsPeriodIncreaseDecrease unitRef="USD" contextRef="Y12Q1" decimals="INF"> 11755 </us-gaap:CashAndCashEquivalentsPeriodIncreaseDecrease>
<us-gaap:CashAndCashEquivalentsPeriodIncreaseDecrease unitRef="USD" contextRef="Y11Q1" decimals="INF"> -39245 </us-gaap:CashAndCashEquivalentsPeriodIncreaseDecrease>
<us-gaap:CashAndCashEquivalentsAtCarryingValue unitRef="USD" contextRef="E10" decimals="INF"> 39360 </us-gaap:CashAndCashEquivalentsAtCarryingValue>
<us-gaap:CashAndCashEquivalentsAtCarryingValue unitRef="USD" contextRef="E11Q1" decimals="INF"> 115 </us-gaap:CashAndCashEquivalentsAtCarryingValue>
<us-gaap:InterestPaid unitRef="USD" contextRef="Y12Q1" decimals="INF"> 51553 </us-gaap:InterestPaid>
<us-gaap:InterestPaid unitRef="USD" contextRef="Y11Q1" decimals="INF"> 75834 </us-gaap:InterestPaid>
<us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock contextRef="Y12Q1">
<!--egx--><div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"> <div style="TEXT-ALIGN:left; TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt"><font style="DISPLAY:inline; FONT-WEIGHT:bold"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Note 1. Organization and Business Activity</font></font></div></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Basis of Presentation</font> - The accompanying unaudited condensed consolidated financial statements of ZYTO Corp and subsidiary (the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles. These accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Operating results for the three months ended March 31, 2012, are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2012, or any portion thereof.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Unless the context otherwise requires, all references to “we,” “us,” “our,” the “Company” and “ZYTO” are to ZYTO Corp and subsidiary.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Organization</font> – Our Company consists of ZYTO Corp (a Delaware corporation, formerly known as Quiver Corporation (“Quiver”)) and its wholly owned subsidiary, ZYTO Technologies, Inc. (a Nevada corporation)(the “Subsidiary”).</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Business Activity</font> – Our Company’s operations consist of the manufacturing and distribution of biocommunication devices and software designed to facilitate communication between computers and the human body.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Business Condition</font> – As of March 31, 2012, and December 31, 2011, we had an accumulated deficit of $8,041,598 and $8,107,421 respectively.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">During the three months ended March 31, 2012 and 2011, we recognized net income of $65,823 and a net loss of $331,152, respectively.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">As of March 31, 2012, and December 31, 2011, our current liabilities exceeded our current assets by $950,170 and $1,016,852, respectively.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">These factors raise substantial doubt about our ability to continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of the uncertainty. To increase revenue, we intend to focus on customer retention and expanding our customer base.</font></div>
</us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock>
<us-gaap:SignificantAccountingPoliciesTextBlock contextRef="Y12Q1">
<!--egx--><div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"><font style="DISPLAY:inline; FONT-WEIGHT:bold">Note 2.</font><font style="DISPLAY:inline; FONT-WEIGHT:bold"> </font><font style="DISPLAY:inline; FONT-WEIGHT:bold; TEXT-DECORATION:underline">Summary of Significant Accounting Policies </font></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s condensed consolidated financial statements. The condensed consolidated financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Principles of Consolidation </font>– The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, and its subsidiary in which the Company has a controlling financial interest. The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiary at March 31, 2012, and for the three months ended March 31, 2012 and 2011, reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary to present fairly the consolidated financial position and results of operations for the periods presented. All significant intercompany transactions and accounts are eliminated in consolidation.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Use of Estimates</font> – In preparing our unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Revenue Recognition</font> – We recognize revenue from customers upon the delivery of the system hardware. At the time payment is received, the system hardware is shipped and the customer receives an e-mail which includes a link to download the software. Upon shipment, the customer has no right of return and the transaction is final. Thirty days from the date of purchase, the customer is required to pay a monthly subscription fee in order for the software to remain active. Subscription revenue is recognized upon the performance of services. In the event the customer cancels his or her monthly subscription or the monthly subscription fee is not received, the software automatically deactivates and the equipment is no longer functional.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">We recognize revenue when persuasive evidence of an arrangement exits, delivery has occurred, the customer no longer has the right of return, the fee is fixed or determinable and collection has been made or is reasonably assured.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Revenues are shown net of any related sales or use taxes for sales transactions where applicable.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt"> <div style="TEXT-ALIGN:left; TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt"></div></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Accounts Receivable</font> – We record receivables due from our customers at the time the sale is recorded in accordance with our revenue recognition policies. These receivables consist of amounts due from the sale of products and services rendered. The future collectability of these amounts can be impacted by our collection efforts, the financial stability of our customers, and the general economic climate in which we operate. Recent economic conditions have increased the uncertainty in making these estimates. Any adverse change in these factors could have a significant impact on the collectability of these assets and could have a material impact on our consolidated financial statements.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">We apply a consistent practice of establishing an allowance for accounts that we feel may become uncollectible through reviewing the historical aging of our receivables. When we become aware of the inability of a customer to meet its financial obligations (e.g., where it is in financial distress or has filed for bankruptcy), we specifically reserve for the potential bad debt to reduce the net recognized receivable to the amount we reasonably believe will be collected. The valuation of receivables is performed on a quarterly basis. Amounts considered uncollectible and shown net of an allowance for doubtful accounts were $128,703 and $128,704 at March 31, 2012, and December 31, 2011, respectively.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">During 2011, we began to offer long-term financing to our customers. As a result, we have classified receivables that are reasonably expected to be realized outside of our normal operating cycle as long-term. These long-term receivables are realized when a customer signs a financing contract for purchases over $5,000, have a maturity of 3-5 years, and bear interest at an annual rate of 24% if the account remains in good standing. In the event the customer defaults, the annual long-term interest increases to 34%. We recognize interest income from these receivables monthly as it is earned. Interest income is recorded as a component of revenues in our condensed consolidated statement of operations.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Basic and Diluted Income (Loss) per Share</font> – Basic income (loss) per share is computed on the basis of the weighted-average number of common shares outstanding during the year. Diluted income (loss) per share is computed on the basis of the weighted-average number of common shares and all dilutive potentially issuable common shares outstanding during the year.</font></div> <div align="center"> <table width="80%" cellpadding="0" cellspacing="0"> <tr> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="20%" colspan="6" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">For the Three Months Ended</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr> <td width="58%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="20%" colspan="6" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">March 31,</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr> <td width="58%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2012</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2011</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Net Income (loss)</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">65,823</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">(331,152</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">)</font></td></tr> <tr bgcolor="white"> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Basic Weighted-Average Common Shares Outstanding</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">34,857,543</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">34,547,170</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Effect of dilutive-securities Options</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">1,954,998</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Diluted Weighted-Average Common Shares Outstanding</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">36,812,541</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">34,547,170</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Basic Income (loss) Per Common Share Net Income (loss)</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">0.00</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">(0.01</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">)</font></td></tr> <tr bgcolor="white"> <td width="58%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Diluted Income (loss) Per Common Share Net Income (loss)</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">0.00</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">(0.01</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">)</font></td></tr></table></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div>
</us-gaap:SignificantAccountingPoliciesTextBlock>
<us-gaap:InventoryDisclosureTextBlock contextRef="Y12Q1">
<!--egx--><div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline; FONT-WEIGHT:bold">Note 3. <font style="DISPLAY:inline; TEXT-DECORATION:underline">Inventory</font></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Inventory consisted of the following as of March 31, 2012, and December 31, 2011:</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div align="center"> <table width="80%" cellpadding="0" cellspacing="0"> <tr> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">March 31,</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">December 31,</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr> <td width="58%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2012</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2011</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Raw Materials</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">14,330</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">4,631</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Finished Goods</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">16,510</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">12,927</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" style="PADDING-BOTTOM:4px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">30,840</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:4px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">17,558</font></td></tr></table></div>
</us-gaap:InventoryDisclosureTextBlock>
<us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock contextRef="Y12Q1">
<!--egx--><div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline; FONT-WEIGHT:bold">Note 4. <font style="DISPLAY:inline; TEXT-DECORATION:underline">Property and Equipment</font></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Property and equipment consisted of the following as of March 31, 2012, and December 31, 2011:</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"> <div align="center"> <table width="80%" cellpadding="0" cellspacing="0"> <tr> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">March 31,</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">December 31,</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr> <td width="58%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2012</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2011</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Computer equipment</font></div></td> <td width="1%" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">186,589</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">182,678</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Furniture and fixtures</font></div></td> <td width="1%" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">98,966</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">98,966</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Production equipment</font></div></td> <td width="1%" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">62,681</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">62,681</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Software</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">50,034</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">48,115</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">398,270</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">392,440</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Accumulated depreciation</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">(276,603</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline">)</font></td> <td width="1%" style="PADDING-BOTTOM:2px" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">(259,747</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline">)</font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" style="PADDING-BOTTOM:4px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:4px" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">121,667</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:4px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:4px" align="right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">132,693</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:4px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr></table></div></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Depreciation expense for the three months ended March 31, 2012 and 2011, was $16,856 and $18,604, respectively.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, as follows:</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div align="center"> <table width="80%" cellpadding="0" cellspacing="0"> <tr> <td width="48%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="38%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="14%" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Life</font></div></td></tr> <tr bgcolor="#cceeff"> <td width="48%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Computer equipment</font></div></td> <td width="38%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="14%" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2-3 years</font></div></td></tr> <tr bgcolor="white"> <td width="48%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Software</font></div></td> <td width="38%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="14%" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2-3 years</font></div></td></tr> <tr bgcolor="#cceeff"> <td width="48%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Furniture and fixtures</font></div></td> <td width="38%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="14%" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">5-7 years</font></div></td></tr> <tr bgcolor="white"> <td width="48%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Production equipment</font></div></td> <td width="38%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="14%" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">3-20 years</font></div></td></tr></table></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div>
</us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock>
<us-gaap:ShortTermDebtTextBlock contextRef="Y12Q1">
<!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt; tab-stops:-.75in -.5in 0in .5in .75in 1.5in 2.0in 2.5in 3.0in 3.5in 4.0in right 5.0in"><b>Note 5. <u>Line of Credit</u></b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt; tab-stops:-.75in -.5in 0in .5in .75in 1.5in 2.0in 2.5in 3.0in 3.5in 4.0in right 5.0in"><b><u><font style="TEXT-DECORATION:none"> </font></u></b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On February 7, 2012, we renegotiated and amended our existing line of credit with a financial institution. Under this revolving line of credit, as amended, we had $100,000 of available borrowings with a maturity date of April 5, 2012. As of March 31, 2012 and December 31, 2011, the amount drawn on the line totaled $100,000.  The interest rate to be applied to the unpaid principal balance during the term is 5.25% per annum as of March 31, 2012 and December 31, 2011.  </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt; tab-stops:-.75in -.5in 0in .5in .75in 1.5in 2.0in 2.5in 3.0in 3.5in 4.0in right 5.0in">Borrowings under the line were collateralized by a security interest in all of our assets. The line of credit is personally guaranteed by one of our principal officers. As of  May 15, 2012, we were in negotiations to extend the maturity date of the line of credit further. </p>
</us-gaap:ShortTermDebtTextBlock>
<us-gaap:LongTermDebtTextBlock contextRef="Y12Q1">
<!--egx--><div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline; FONT-WEIGHT:bold">Note 6. <font style="DISPLAY:inline; TEXT-DECORATION:underline">Notes Payable</font></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">On August 1, 2009, we amended and restated the terms of a note payable with InteMedica, LLC. This note bears interest at 12% per annum, with $8,000 due monthly until paid in full. As of March 31, 2012, the note payable was in default. As of March 31, 2012, the note payable balance was $46,942 and accrued interest totaled $7,792. </font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">On January 28, 2011, we received $50,000 in exchange for a promissory note. The 18-month note matures on June 28, 2012, and bears interest at 10% per annum. As part of the agreement, we issued the lender 25,000 shares of common stock (see Note 11). We plan to make interest-only payments until the maturity date, at which time the full principal amount is payable.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Notes payable consisted of the following as of March 31, 2012, and December 31, 2011:</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div align="center"> <table width="80%" cellpadding="0" cellspacing="0"> <tr> <td width="58%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2012</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2011</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Unsecured note payable to InteMedica, LLC, interest at 12%, monthly payments of $8,000, in default</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">46,942</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">46,942</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Unsecured note payable to shareholder, interest at 10%, interest payments due monthly, principal due at June 28, 2012</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">50,000</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">50,000</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Total notes payable</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">96,942</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">96,942</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Less current portion</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">(96,942</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline">)</font></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">(96,942</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline">)</font></td></tr> <tr bgcolor="white"> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Long-term portion</font></div></td> <td width="1%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:4px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:4px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr></table></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div>
</us-gaap:LongTermDebtTextBlock>
<us-gaap:RelatedPartyTransactionsDisclosureTextBlock contextRef="Y12Q1">
<!--egx--><div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline; FONT-WEIGHT:bold">Note 7. <font style="DISPLAY:inline; TEXT-DECORATION:underline">Related Party Note Payable</font></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">On March 26, 2012, we executed an amended and restated promissory note with an officer for intellectual property and other related technologies, extending the maturity date to December 31, 2013, bearing interest at 7% per annum. During three months ended March 31, 2012 and 2011, we recognized interest expense from the promissory note of $43,630 and $43,151, respectively. During the three months ended March 31, 2012 and 2011, we paid $5,251 and $37,870 in cash to the officer for interest expense from the promissory note, respectively.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Related party note payable consisted of the following as of March 31, 2012, and December 31, 2011:</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div align="center"> <table width="80%" cellpadding="0" cellspacing="0"> <tr> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">March 31,</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">December 31,</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr> <td width="58%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2012</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">2011</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Unsecured note payable to shareholder, interest at 7%, net of discount of $96,570 and $128,759, respectively</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">2,403,430</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">2,371,241</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Total related party notes payable</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">2,403,430</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">2,371,241</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Less current portion</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="58%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="58%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Long-term portion</font></div></td> <td width="1%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">2,403,430</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:4px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">2,371,241</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:4px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr></table></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"></div>
</us-gaap:RelatedPartyTransactionsDisclosureTextBlock>
<us-gaap:ResearchDevelopmentAndComputerSoftwareDisclosureTextBlock contextRef="Y12Q1">
<!--egx--><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-WEIGHT:bold"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Note 8. Research and Development</font></font></div><div style="DISPLAY:block; TEXT-INDENT:0pt"><br></br></div><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">During the three months ended March 31, 2012 and 2011, we capitalized $60,203 and $45,260, respectively, of costs relating to significant enhancements and upgrades to our proprietary software. We capitalize certain software development costs incurred subsequent to the establishment of technological feasibility and amortize those costs over the estimated lives of the related products. During the three months ended March 31, 2012 and 2011, amortization of these costs was $39,071 and $21,191, respectively.  During the three months ended March 31, 2012 and 2011, we expensed $58,884 and $38,397 of research and development costs, respectively. This is recorded in research and development expenses on our condensed consolidated statement of operations.</font></div><div style="DISPLAY:block; TEXT-INDENT:0pt"></div><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Amortization is computed on a straight-line basis over the estimated useful lives of the assets. All capitalized software development costs have been amortized over their estimated useful life of 3 years.</font></div><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="justify"> </div><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Future amortization costs related to capitalized research and development are as follows:</font></div><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline"></font> </div><div align="center"><table width="80%" cellpadding="0" cellspacing="0"><tr bgcolor="#cceeff"><td width="69%" align="left" valign="bottom"><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">2012</font></div></td><td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"> </font></td><td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td><td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">122,167</font></td><td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"> </font></td></tr><tr bgcolor="white"><td width="69%" align="left" valign="bottom"><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">2013</font></div></td><td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"> </font></td><td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"> </font></td><td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">162,478</font></td><td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"> </font></td></tr><tr bgcolor="#cceeff"><td width="69%" align="left" valign="bottom"><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">2014</font></div></td><td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"> </font></td><td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"> </font></td><td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">52,520</font></td><td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"> </font></td></tr><tr bgcolor="white"><td width="69%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">2015</font></div></td><td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"> </font></td><td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"> </font></td><td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">1,548</font></td><td width="1%" style="PADDING-BOTTOM:2px; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"> </font></td></tr><tr bgcolor="#cceeff"><td width="69%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Total amortization costs</font></div></td><td width="1%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"><font style="DISPLAY:inline"> </font></td><td width="1%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td><td width="8%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">338,713</font></td><td width="1%" style="PADDING-BOTTOM:4px; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"> </font></td></tr></table></div><div style="DISPLAY:block; TEXT-INDENT:0pt"><br></br></div><div style="DISPLAY:block; TEXT-INDENT:0pt"> </div>
</us-gaap:ResearchDevelopmentAndComputerSoftwareDisclosureTextBlock>
<us-gaap:CommitmentsAndContingenciesDisclosureTextBlock contextRef="Y12Q1">
<!--egx--><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline; FONT-WEIGHT:bold">Note 9. <font style="DISPLAY:inline; TEXT-DECORATION:underline">Commitments and Contingencies</font></font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt"><br></br><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Operating Leases</font> – The Company is obligated under certain non-cancelable operating leases for the rental of office space. Total lease expense for the three months ended March 31, 2012 and 2011, was $45,578 and $36,145, respectively.</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt"><br></br><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Future minimum lease payments under non-cancelable operating leases are as follows:</font></div> <div style="DISPLAY:block; TEXT-INDENT:0pt"><br></br><br></br></div> <div align="center"> <table width="80%" cellpadding="0" cellspacing="0"> <tr bgcolor="#cceeff"> <td width="69%" style="TEXT-ALIGN:left" valign="bottom"> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt; TEXT-ALIGN:left"><font style="DISPLAY:inline">2012</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">140,837</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="69%" style="TEXT-ALIGN:left" valign="bottom"> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt; TEXT-ALIGN:left"><font style="DISPLAY:inline">2013</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">192,477</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="69%" style="PADDING-BOTTOM:2px; TEXT-ALIGN:left" valign="bottom"> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt; TEXT-ALIGN:left"><font style="DISPLAY:inline">2014</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">32,236</font></td> <td width="1%" style="PADDING-BOTTOM:2px; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="69%" style="PADDING-BOTTOM:4px; TEXT-ALIGN:left" valign="bottom"> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt; TEXT-ALIGN:left"><font style="DISPLAY:inline">Total minimum payments</font></div></td> <td width="1%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">365,550</font></td> <td width="1%" style="PADDING-BOTTOM:4px; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr></table></div> <div style="DISPLAY:block; TEXT-INDENT:0pt"><br></br><br></br></div> <div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Lawsuits</font><font style="DISPLAY:inline; FONT-WEIGHT:bold"> </font>– Litigation has arisen in the course of our business, none of which is deemed to be material.</font></div>
</us-gaap:CommitmentsAndContingenciesDisclosureTextBlock>
<us-gaap:LeasesOfLesseeDisclosureTextBlock contextRef="Y12Q1">
<!--egx--><div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-WEIGHT:bold"><font style="DISPLAY:inline; TEXT-DECORATION:underline">Note 10. Capital Lease</font></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">In October 2010, we entered into a lease agreement for the purpose of financing capital equipment. The lease agreement is payable in 60 monthly payments and bears interest at a rate of 7.00% per annum. The loan amount is collateralized by the equipment leased.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Future minimum lease payments under our non-cancelable capital lease are as follows:</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div align="center"> <table width="80%" cellpadding="0" cellspacing="0"> <tr bgcolor="#cceeff"> <td width="69%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">For the nine months ended December 31, 2012</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">1,118</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="69%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">For the year ended December 31, 2013</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">4,296</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="69%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">For the year ended December 31, 2014</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">4,296</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="69%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">For the year ended December 31, 2015</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">2,809</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="69%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Total future minimum lease payments</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">12,519</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="69%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Amount representing interest</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">(1,369</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline">)</font></td></tr> <tr bgcolor="#cceeff"> <td width="69%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Present value of future minimum lease payments</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">11,150</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="69%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Current portion of capital lease</font></div></td> <td width="1%" style="PADDING-BOTTOM:2px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="BORDER-BOTTOM:black 2px solid; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">(4,296</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline">)</font></td></tr> <tr bgcolor="#cceeff"> <td width="69%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Capital lease, less current portion</font></div></td> <td width="1%" style="PADDING-BOTTOM:4px" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="BORDER-BOTTOM:black 4px double; TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">6,854</font></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:4px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr></table></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"></div>
</us-gaap:LeasesOfLesseeDisclosureTextBlock>
<us-gaap:StockholdersEquityNoteDisclosureTextBlock contextRef="Y12Q1">
<!--egx--><div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline; FONT-WEIGHT:bold">Note 11. <font style="DISPLAY:inline; TEXT-DECORATION:underline">Equity</font></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">On June 15, 2010, we entered into an agreement with a public relations firm retained in 2009 and 2010 to provide public and financial communication services. The agreement was for a period of twelve and one half months. As compensation for services, we agreed to issue 1,200,000 shares of restricted common stock to the public relations firm. We issued 1,100,000 shares of the 1,200,000 shares due under the contract, and mutually agreed to terminate the remainder of the contract. The shares are valued based on the fair value of the shares on the date they were released from escrow. The total value of shares issued for the three months ended March 31, 2012 and 2011, was $0 and $41,879, of which the entire amount was expensed.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">As discussed in Note 7, we received $50,000 in 2011 from a lender in exchange for a promissory note. The 18-month note expires on June 28, 2012, bearing interest at 10% per annum. As part of the agreement we issued the lender 25,000 shares of common stock. The shares were valued at a grant date fair value of $0.09 per share. The total value of the shares issued was $2,251, which was determined by multiplying the number of shares granted by the closing market price of our common stock on the grant date.</font></div>
</us-gaap:StockholdersEquityNoteDisclosureTextBlock>
<us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock contextRef="Y12Q1">
<!--egx--><div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline; FONT-WEIGHT:bold">Note 12. <font style="DISPLAY:inline; TEXT-DECORATION:underline">Stock Options</font></font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">On July 8, 2011, the Board of Directors approved the ZYTO Corp 2011 Equity Incentive Plan (“the 2011 Plan”). On December 6, 2011, the stockholders also approved the 2011 Plan.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">The 2011 Plan permits the granting of equity awards to purchase up to 5,000,000 shares of common stock. Persons eligible to participate in the 2011 Plan include members of the Board, our consultants, all of our employees, and our subsidiary, as determined by the Board.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">There were no issuances from the 2011 Plan for the three months ended March 31, 2012. As of March 31, 2012, there were 3,045,002 shares available for issuance under the 2011 Plan.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">On August 16, 2011, we granted stock options to acquire 1,864,998 shares of common stock to our employees, valued at $54,589. These options are exercisable at $0.03 per share, based on the closing price of our common stock on the date of issue. These options vest yearly over three years starting August 16, 2012, and expire on August 16, 2021.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">On August 16, 2011, we granted stock options to acquire 90,000 shares of common stock to certain non-employee directors, valued at $2,624. These options are exercisable at $0.03 a share, based on the closing price of our common stock on the date of issue. These options vest annually starting April 1, 2012, and expire August 16, 2021. These options vest over 2 years.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">A summary of the status of stock options at March 31, 2012, and changes during the three months then ended, is presented in the following table:</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div align="center"> <table width="80%" cellpadding="0" cellspacing="0"> <tr> <td width="36%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Weighted</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr> <td width="36%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Shares</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Weighted</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Average</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr> <td width="36%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Under</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Average</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Remaining</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Aggregate</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr> <td width="36%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Option</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Exercise</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Contractual</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Intrinsic</font></div></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr> <td width="36%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">or Warrant</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Price</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Life</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="9%" colspan="2" style="BORDER-BOTTOM:black 2px solid" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="center"><font style="DISPLAY:inline">Value</font></div></td> <td width="1%" style="TEXT-ALIGN:left; PADDING-BOTTOM:2px" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="36%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Outstanding at December 31, 2011</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">1,954,998</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">0.03</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">9.63</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline">$</font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="36%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Granted or issued</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="36%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Expired</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="36%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Outstanding at March 31, 2012</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">1,954,998</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">0.03</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">9.38</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">19,550</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="#cceeff"> <td width="36%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr> <tr bgcolor="white"> <td width="36%" align="left" valign="bottom"> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="left"><font style="DISPLAY:inline">Exercisable at March 31, 2012</font></div></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" align="left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td> <td width="8%" style="TEXT-ALIGN:right" valign="bottom"><font style="DISPLAY:inline">-</font></td> <td width="1%" style="TEXT-ALIGN:left" valign="bottom"><font style="DISPLAY:inline"></font></td></tr></table></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">The fair value of stock options is estimated on the date of grant or issuance using the Black-Scholes option pricing model. The expected life of stock options represents the period of time that the stock options granted are expected to be outstanding prior to exercise. The expected volatility is based on the historical price volatility of the Company’s common stock. The risk-free interest rate represents the U.S. Treasury constant maturities rate for the expected life of the related stock options. The dividend yield represents anticipated cash dividends to be paid over the expected life of the stock options. The intrinsic values are based on a March 31, 2012, closing price of $0.04 per share.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">Generally accepted accounting principles for stock options require the recognition of the cost of services received in exchange for an award of equity instruments in the financial statements, is measured based on the grant date fair value of the award, and requires the compensation expense to be recognized over the period during which an employee or other service provider is required to provide service in exchange for the award (the vesting period). No income tax benefit has been recognized for share-based compensation arrangements and no compensation cost has been capitalized in the accompanying condensed consolidated balance sheet.</font></div> <div style="TEXT-INDENT:0pt; DISPLAY:block"><br></br></div> <div style="TEXT-INDENT:0pt; DISPLAY:block; MARGIN-LEFT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">As of March 31, 2012, there was approximately $35,101 of unrecognized compensation cost related to stock options that will be recognized over a weighted average period of approximately 1.97 years. For the three months ended March 31, 2012, we recorded compensation expense related to stock options of $8,824 as a general and administrative expense in our condensed consolidated statement of operations. There was no compensation expense related to stock options for the three months ended March 31, 2011.</font></div>
</us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock>
<us-gaap:IncomeLossFromContinuingOperationsPerBasicShare unitRef="UsdPerShare" contextRef="Y12Q1" decimals="2"> 0.00 </us-gaap:IncomeLossFromContinuingOperationsPerBasicShare>
<us-gaap:IncomeLossFromContinuingOperationsPerBasicShare unitRef="UsdPerShare" contextRef="Y11Q1" decimals="2"> -0.01 </us-gaap:IncomeLossFromContinuingOperationsPerBasicShare>
<us-gaap:WeightedAverageNumberOfSharesOutstandingBasic unitRef="Shares" contextRef="Y12Q1" decimals="INF"> 34857543 </us-gaap:WeightedAverageNumberOfSharesOutstandingBasic>
<us-gaap:WeightedAverageNumberOfSharesOutstandingBasic unitRef="Shares" contextRef="Y11Q1" decimals="INF"> 34547170 </us-gaap:WeightedAverageNumberOfSharesOutstandingBasic>
<fil:NetIncomeLossPerCommonShare unitRef="UsdPerShare" contextRef="Y12Q1" decimals="2"> 0.00 </fil:NetIncomeLossPerCommonShare>
<fil:NetIncomeLossPerCommonShare unitRef="UsdPerShare" contextRef="Y11Q1" decimals="2"> -0.01 </fil:NetIncomeLossPerCommonShare>
<us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding unitRef="Shares" contextRef="Y12Q1" decimals="INF"> 36812541 </us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding>
<us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding unitRef="Shares" contextRef="Y11Q1" decimals="INF"> 34547170 </us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding>
<us-gaap:ConcentrationRiskDisclosureTextBlock contextRef="Y12Q1">
<!--egx--><div style="DISPLAY:block; TEXT-INDENT:0pt"><font style="DISPLAY:inline; FONT-WEIGHT:bold">Note 13. <font style="DISPLAY:inline; TEXT-DECORATION:underline">Concentrations</font></font></div><div style="DISPLAY:block; TEXT-INDENT:0pt"><br></br></div><div style="DISPLAY:block; MARGIN-LEFT:0pt; TEXT-INDENT:0pt; MARGIN-RIGHT:0pt" align="justify"><font style="DISPLAY:inline">During the three months ended March 31, 2012, we purchased approximately 69% of our inventory from two separate suppliers. During the year ended December 31, 2011, we purchased approximately 83% of our inventory from the same two suppliers. We currently purchase all of our Hand Cradle boards and Hand Cradle shells, important components of our products, from two suppliers. Although there are a limited number of manufacturers of these components, management believes that other suppliers could provide similar components on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would affect operating results adversely.</font></div>
</us-gaap:ConcentrationRiskDisclosureTextBlock>
<dei:EntityCommonStockSharesOutstanding unitRef="Shares" contextRef="I120515" decimals="INF"> 34857543 </dei:EntityCommonStockSharesOutstanding>
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<identifier scheme="http://www.sec.gov/CIK"> 0001406796 </identifier>
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<endDate> 2012-03-31 </endDate>
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<instant> 2011-12-31 </instant>
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<context id="Y11Q1">
<entity>
<identifier scheme="http://www.sec.gov/CIK"> 0001406796 </identifier>
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<endDate> 2011-03-31 </endDate>
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<context id="E10">
<entity>
<identifier scheme="http://www.sec.gov/CIK"> 0001406796 </identifier>
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<period>
<instant> 2010-12-31 </instant>
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<context id="E11Q1">
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<identifier scheme="http://www.sec.gov/CIK"> 0001406796 </identifier>
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<instant> 2011-03-31 </instant>
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<entity>
<identifier scheme="http://www.sec.gov/CIK"> 0001406796 </identifier>
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<instant> 2012-05-15 </instant>
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<unit id="Shares">
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<measure> iso4217:USD </measure>
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<unit id="UsdPerShare">
<divide>
<unitNumerator>
<measure> iso4217:USD </measure>
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<unitDenominator>
<measure> shares </measure>
</unitDenominator>
</divide>
</unit>
</xbrl>

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