NOTE 12 – OPERATING LEASE

The Company leased its Palm City, Florida facility. On March 2, 2009 the lease was renewed for $1,200 per month. The Company held an additional option to renew the lease “at the market price.” This renewed lease went into effect June 1, 2009. Rent expense for the three months ended June 30, 2011 and 2010 was $5,112 and $7,668, respectively.

In April 2011, the Company entered into a new three year lease for office space in Stuart. The lease begins in August and provides for minimum monthly lease payments of $1,690, $1,803 and $1,915 for years one, two and three, respectively.