In April 2012, the Company agreed to an adjustment as negotiated through this time to enable inducement of further financing of the Company. Pursuant to the anti-dilution provisions in the convertible instruments and warrants, the conversion price of all convertible instruments is now $0.01 (with the exception of the conversion price of the October 2006 Debenture which is already priced at the lesser of $0.01 and 60% of the average of the lowest three trading prices occurring at any time during the 20 trading days preceding conversion), and the exercise price of all warrants is now $0.01, and the number of shares underlying the warrants has increased such that the number of shares underlying each warrant is equal to the aggregate exercise price in effect prior to the adjustment divided by the new exercise price of $0.01.

Subsequent to the quarter end, we received an additional $57,500 from the sale of a total of $1,000,000 of 8% convertible debentures, which funds were used to position ourselves for the commercial release of a line of products.