Operating Leases

There was no rent expense for the years ended December 31, 2012 and 2011 as such office space was contributed at no cost from the Company President. From inception (August 29, 2001) through December 31, 2012, rent expense was $514,936.

Payroll Taxes

The Company has failed to remit payroll tax payments since 2006, as required by various taxing authorities. When payment is ultimately made management believes that the Company will be assessed various penalties for the delayed payments. As of December 31, 2012 and 2011, to the Company estimates the amount of taxes, interest, and penalties that the Company would incur as a result of these unpaid taxes to be $374,223 and $335,823, respectively.