--03-31 htm US GEOTHERMAL INC 2013-03-31 0001172136 No Smaller Reporting Company No 10-Q false 101516764 Yes 2013 Q1 0001172136 2013-05-10 0001172136 2013-01-01 2013-03-31 0001172136 2013-03-31 0001172136 2012-12-31 0001172136 2012-01-01 2012-03-31 0001172136 2011-12-31 0001172136 2012-03-31 0001172136 us-gaap:CommonStockMember 2012-03-31 0001172136 us-gaap:AdditionalPaidInCapitalMember 2012-03-31 0001172136 us-gaap:RetainedEarningsMember 2012-03-31 0001172136 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2012-03-31 0001172136 us-gaap:NoncontrollingInterestMember 2012-03-31 0001172136 us-gaap:CommonStockMember 2012-04-01 2012-12-31 0001172136 us-gaap:AdditionalPaidInCapitalMember 2012-04-01 2012-12-31 0001172136 2012-04-01 2012-12-31 0001172136 us-gaap:NoncontrollingInterestMember 2012-04-01 2012-12-31 0001172136 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2012-04-01 2012-12-31 0001172136 us-gaap:RetainedEarningsMember 2012-04-01 2012-12-31 0001172136 us-gaap:CommonStockMember 2012-12-31 0001172136 us-gaap:AdditionalPaidInCapitalMember 2012-12-31 0001172136 us-gaap:RetainedEarningsMember 2012-12-31 0001172136 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2012-12-31 0001172136 us-gaap:NoncontrollingInterestMember 2012-12-31 0001172136 us-gaap:NoncontrollingInterestMember 2013-01-01 2013-03-31 0001172136 us-gaap:AdditionalPaidInCapitalMember 2013-01-01 2013-03-31 0001172136 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2013-01-01 2013-03-31 0001172136 us-gaap:RetainedEarningsMember 2013-01-01 2013-03-31 0001172136 us-gaap:CommonStockMember 2013-03-31 0001172136 us-gaap:AdditionalPaidInCapitalMember 2013-03-31 0001172136 us-gaap:RetainedEarningsMember 2013-03-31 0001172136 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2013-03-31 0001172136 us-gaap:NoncontrollingInterestMember 2013-03-31 0001172136 2012-01-01 2012-12-31 shares iso4217:USD iso4217:USD shares pure utr:D utr:Y utr:M utr:MW utr:acre

16467454

12908779

2995000

2271055

3296890

40113741

42884200

827826

839104

62675076

62923973

45886

65551

1426700

159496835

160589254

15428298

15490618

239072795

240496096

712704

1481959

1521342

1122746

6092

3391

2125000

333334

1000000

5119939

8089704

45962

45278

1576342

11440715

13319420

2125000

57272

69039

102467951

102124167

102525223

104318206

113965938

117637626

101516

99584212

99524850

-23609

-3944

-31456627

-32845150

68205492

66777272

56901365

56081198

125106857

122858470

239072795

240496096

250000000

0.001

101516764

6988660

1057092

98330

101995

7086990

1159087

1326081

72888

1449821

1658400

698153

2984481

2220862

4102509

-1061775

292240

178939

299381

112163

564488

205750

59362

304131

50505

33356

162009

25020

480102

40657

-494724

1867430

1354083

2235079

-2415858

853800

-853800

2235079

-2415858

846556

-772135

1388523

-1643723

-19665

31551

1368858

-1612172

0.01

-0.02

0.01

-0.02

101516764

85016732

122568560

85016732

1688787

717240

0 -548701

-1025835

-1107060

-766554

-1549918

-11279

697804

4253788

-1986448

555814

6908345

1051243 0

495429

-6908345

58961

7460

6755572

33849

31267

1153070

11083

3278

-1190542

6779988

3558675

-2114805

6547856

4433051

398596 20131980

203866

13604604

772661

2142658 0 1719216 0

481718

1748

85080445

85080

93475298

-31530306

23002

49764445

111817519

16436319 16436 5413551 5429987 7005785 7005785

88209

636001

-26946

-1314844

-600823

-1915667

101516764

101516

99524850

-32845150

-3944

56081198

7460 7460

33849

59362

-19665

1388523

846556

101516764

101516

99584212

-31456627

-23609

56901365

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS When U.S. Cobalt Inc. (“GTH” or the “Company”) completed a reverse take-over on December 19, 2003, the former stockholders of U.S. Geothermal Inc. (“GEO – Idaho”) a company incorporated on February 26, 2002 in the State of Idaho, U.S.A. acquired control of GTH. In connection with the transaction, U.S. Cobalt Inc. changed its name to U.S. Geothermal Inc. and consolidated its common stock on a one new to five old basis. All references to common shares in these financial statements have been restated to reflect the roll-back of common stock. The Company constructs and manages power plants that utilize geothermal resources to produce energy. The Company’s operations have been, primarily, focused in the Western United States of America. All references to “dollars” or “$” are to United States dollars and all references to CDN are to Canadian dollars. Basis of Presentation These unaudited interim consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Such rules and regulations allow the omission of certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America, so long as such omissions do not render the financial statements misleading. Certain prior period amounts have been reclassified to conform to the current period presentation. In the opinion of management, these financial statements reflect all adjustments that are necessary for a fair statement of the results for the periods presented. All adjustments were of a normal recurring nature. These interim financial statements should be read in conjunction with the annual financial statements of the Company included in its Annual Report on Form 10-KT. The Company consolidates subsidiaries that it controls (more-than- 50% owned) and entities over which control is achieved through means other than voting rights. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, as well as three controlling interests. The accounts of the following companies are consolidated in these financial statements: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="5%">i)</td> <td> U.S. Geothermal Inc. (incorporated in the State of Delaware); </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">ii)</td> <td> U.S. Geothermal Inc. (incorporated in the State of Idaho); </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">iii)</td> <td> U.S. Geothermal Services, LLC (organized in the State of Delaware); </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">iv)</td> <td> Nevada USG Holdings, LLC (organized in the State of Delaware); </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">v)</td> <td> USG Nevada LLC (organized in the State of Delaware); </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">vi)</td> <td> Nevada North USG Holdings, LLC (organized in the State of Delaware); </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">vii)</td> <td> USG Nevada North, LLC (organized in the State of Delaware); </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">viii)</td> <td> Oregon USG Holdings, LLC (organized in the State of Delaware); </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">ix)</td> <td> USG Oregon LLC (organized in the State of Delaware); </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">x)</td> <td> Raft River Energy I LLC (organized in the State of Delaware); </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">xi)</td> <td> Gerlach Geothermal LLC (organized in the State of Delaware); </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">xii)</td> <td> USG Gerlach LLC (organized in the State of Delaware); and </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">xiii)</td> <td> U.S. Geothermal Guatemala, S.A. (organized in Guatemala) </td> </tr> </table> All intercompany transactions are eliminated upon consolidation. Raft River Energy I LLC (“RREI”), a 100% owned subsidiary prior to July 1, 2006, was recorded from July 1, 2006 through March 31, 2011 under the equity method after the addition of a controlling partner for additional project financing. The Company has determined that effective April 1, 2011, RREI should be fully consolidated and a non-controlling interest recognized for the remaining investment value of RREI’s other member. The change was warranted due to circumstances and conditions that affected the control of the entity (See Note 17 for details). In cases where the Company owns a majority interest in an entity but does not own 100% of the interest in the entity, it recognizes a non-controlling interest attributed to the interest controlled by outside third parties. The Company will recognize 100% of the assets and liabilities of the entity, and disclose the non-controlling interest. The statements of operations will consolidate the subsidiary’s full operations, and will separately disclose the elimination of the non-controlling interest’s allocation of profits and losses.

0.50 1.00 1.00 1.00

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following are summarized accounting policies considered to be significant by the Company’s management: Accounting Method The Company’s consolidated financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied in the preparation of the consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the consolidated financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of the Company’s consolidated financial position and consolidated results of operations. Cash and Cash Equivalents The Company considers all unrestricted cash, short-term deposits, and other investments with original maturities of no more than ninety days when acquired to be cash and cash equivalents for the purposes of the statement of cash flows. Under the Loan Guarantee Agreement at Neal Hot Springs with the Department of Energy, all funds for USG Oregon LLC are deposited into PNC Bank subject to certain procedural restrictions on use of the funds. At March 31, 2013, $9.0 million in funds were deposited at PNC Bank and unavailable for immediate corporate needs. Discussion regarding restricted cash is included in Note 3. Accounts Receivable Allowance for Doubtful Accounts Trade Accounts Receivable Management estimates the amount of trade accounts receivable that may not be collectible and records an allowance for doubtful accounts, accordingly. The allowance is an estimate based upon aging of receivable balances, historical collection experience, and the periodic credit evaluations of our customers’ financial condition. Receivable balances are written off when we determine that the balance is uncollectible. As of March 31, 2013 and December 31, 2012, there were no balances that were over 90 days past due and no balance in allowance for doubtful accounts was recognized. Grant Accounts Receivable For receivables expected to be received from grants from Federal or State agencies, the Company records the receivable amounts net of the funds expected to be received which may be less than the total amounts requested on the actual grant applications. Therefore, no allowance accounts are considered to be necessary for receivables from grants at March 31, 2013 and December 31, 2012. Concentration of Credit Risk The Company’s cash and cash equivalents, including restricted cash, consisted of commercial bank deposits, money market accounts, and petty cash. Cash deposits are held in commercial banks in Boise, Idaho and Portland, Oregon. Deposits are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per legal entity through December 31, 2013. At March 31, 2013, the Company’s total cash balance, excluding money market funds, was $18,460,774, and bank deposits amounted to $18,478,730. The difference was due to outstanding checks and deposits. Of the bank deposits, $17,383,414 was not covered by or was in excess of FDIC insurance guaranteed limits. At fiscal year end, the Company’s money market funds invested in government backed securities totaled $997,980 and were not subject to deposit insurance. Equity Securities The Company determines the appropriate classification of marketable securities at the time of purchase and reevaluates this designation as of each balance sheet date. The Company classifies these securities as either held-to-maturity, trading, or available-for-sale. All marketable securities and restricted investments were classified as available-for-sale securities. The Company classifies its investments as “available for sale” because it does not intend to actively buy and sell for short-term profits. The Company's investments are subject to market risk, primarily interest rate and credit risk. The fair value of investments is determined using observable or quoted market prices for those securities. Available-for-sale securities are carried at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive income (loss). Realized gains and losses, declines in value judged to be other than temporary and interest on available-for-sale securities are included in net income. The cost of securities sold is based on the specific identification method. Property, Plant and Equipment Property, plant and equipment, including assets under capital lease, are recorded at historical cost. Costs of acquisition of geothermal properties are capitalized in the period of acquisition. Major improvements that significantly increase the useful lives and/or capabilities of the assets are capitalized. A primary factor in determining whether to capitalize construction type costs is the stage of the potential project’s development. Once a project is determined to be commercially viable, all costs directly associated with the development and construction of the project are capitalized. Until that time, all development costs are expensed. A commercially viable project will have, among other factors, a reservoir discovery well or other significant geothermal surface anomaly, a power transmission path that is identified and available, and an electricity off-taker identified. A valid reservoir discovery is generally defined when a test well has been substantially completed that indicates the presence of a geothermal reservoir that has a high probability of possessing the necessary temperatures, permeability, and flow rates. After a valid discovery has been made, the project enters the development stage. Generally, all costs incurred during the development stage are capitalized and tracked on an individual project basis. If a geothermal project is abandoned, the associated costs that have been capitalized are charged to expense in the year of abandonment. Expenditures for repairs and maintenance are charged to expense as incurred. Interest costs incurred during the construction period of defined major projects from debt that is specifically incurred for those projects are capitalized. Funds received from grants associated with capital projects reduce the cost of the asset directly associated with the individual grants. The offset of the cost of the asset associated with grant proceeds is recorded in the period when the requirements of the grant are substantially complete and the amount can be reasonably estimated. Direct labor costs, incurred for specific major projects expected to have long-term benefits will be capitalized. Direct labor costs subject to capitalization include employee salaries, as well as, related payroll taxes and benefits. With respect to the allocation of salaries to projects, salaries are allocated based on the percentage of hours that our key managers, engineers and scientists work on each project and are invoiced to the project each month. These individuals track their time worked at each project. Major projects are, generally, defined as projects expected to exceed $100,000. Direct labor includes all of the time incurred by employees directly involved with construction and development activities. General and/or indirect management time and time spent evaluating the feasibility of potential projects are expensed when incurred. Employee training time is expensed when incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset. Where appropriate, terms of property rights and revenue contracts can influence the determination of estimated useful lives. Estimated useful lives by major asset categories are summarized as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="70%"> <tr valign="top"> <td align="left"> </td> <td align="center" width="50%">Estimated Useful</td> </tr> <tr valign="top"> <td align="left" style="BORDER-BOTTOM: #000000 1px solid">                                 Asset Categories</td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="50%">Lives in Years</td> </tr> <tr> <td> </td> <td width="50%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Furniture, vehicle and other equipment</td> <td align="center" bgcolor="#e6efff" width="50%"> 3 to 5 </td> </tr> <tr valign="top"> <td align="left">Power plant, buildings and improvements</td> <td align="center" width="50%"> 3 to 30 </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Wells</td> <td align="center" bgcolor="#e6efff" width="50%"> 30 </td> </tr> <tr valign="top"> <td align="left">Well pumps and components</td> <td align="center" width="50%"> 5 to 15 </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Pipelines</td> <td align="center" bgcolor="#e6efff" width="50%"> 30 </td> </tr> <tr valign="top"> <td align="left">Transmission lines</td> <td align="center" width="50%"> 30 </td> </tr> </table> </div> Intangible Assets All costs directly associated with the acquisition of geothermal and surface water rights are capitalized as intangible assets. These costs are amortized over their estimated utilization period. There are several factors that influence the estimated utilization periods as well as underlying fair value that include, but are not limited to, the following: <ul style="TEXT-ALIGN: justify"> <li style="font-family: times new roman,times,serif; font-size: 10pt;">contractual expiration terms of the right,</li> <li style="font-family: times new roman,times,serif; font-size: 10pt;">contractual terms of an associated revenue contract (i.e., PPA’s),</li> <li style="font-family: times new roman,times,serif; font-size: 10pt;">compliance with utilization and other requirements, and</li> <li style="font-family: times new roman,times,serif; font-size: 10pt;">hierarchy of other right holders who share the same resource.</li> </ul> Currently, amortization expense is being calculated on a straight-line basis over an estimated utilization period of 30 years for assets placed in service. If an intangible water or geothermal right is forfeited or otherwise lost, the remaining unamortized costs are expensed in the period of forfeiture. An impaired right is reduced to its estimated fair market value in the year the impairment is realized. Costs incurred that extend the term of an intangible right are capitalized and amortized over the new estimated period of utilization. Impairment of Long-Lived Assets The Company evaluates its long-term assets annually for impairment and when circumstances/events occur that may impact the fair value of the assets. An impairment loss would be recognized if the carrying amount of a capitalized asset is not recoverable and exceeds its fair value. The most recent assessment was performed based upon financial conditions and assumptions as of December 31, 2012, and there have not been any significant changes in financial conditions and assumptions subsequent to that assessment date. Management believes that there have not been any circumstances that have warranted the recognition of losses due to the impairment of long-lived assets. Stock Options Granted to Employees and Non-employees The Company follows financial accounting standards that require the measurement of the value of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. For employees, directors and officers, the fair value of the awards are expensed over the vesting period. The current vesting period for all options is eighteen months. Non-employee stock-based compensation is granted at the Board of Director’s discretion to reward select consultants for exceptional performance. Prior to issuance of the awards, the Company was not under any obligation to issue the stock options. Subsequent to the award, the recipient was not obligated to perform any services. Therefore, the fair value of these options was expensed on the grant date, which was also the measurement date. Under the fair value recognition provisions, share-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period. Determining the fair value of share-based awards at the grant date requires judgment. In addition, judgment is also required in estimating the amount of share-based awards that are expected to be forfeited. If actual results differ significantly from these estimates, stock-based compensation expense and our results of operations could be materially impacted. Stock Based Compensation Granted to Employees The Company recognizes the value of common stock granted to employees and directors over the periods in which the services are received. The value of those services is based upon the estimated fair value of the common stock to be awarded. Estimated fair value is adjusted each reporting period. At the end of each vesting period, estimated fair value is adjusted to fair market value. The adjustment is reflected in the reporting period in which the vesting occurs. Earnings (Losses) Per Share The Company follows financial accounting standards, which provides for calculation of "basic" and "diluted" earnings (losses) per share. Basic earnings per share includes no dilution and is computed by dividing net income available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. Although there were common stock equivalents outstanding at March 31, 2012, they were not included in the calculation of the loss per share because their inclusion would have been considered anti-dilutive. Both basic and diluted were presented for the calculation of the income per share for the three months ended March 31, 2013. Total common stock equivalents on a fully diluted basis at March 31, 2013 and 2012 were 122,768,560 and 97,906,612 ; respectively. Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, trade account and other receivables, refundable tax credits, and accounts payable and accrued liabilities. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values, unless otherwise noted. The Company’s functional currency is the U.S. dollar. Monetary items are converted into U.S. dollars at the rate prevailing at the balance sheet date. Resulting gains and losses are generally included in determining net income for the period in which exchange rates change. Revenue Revenue Recognition Energy Sales The energy sales revenue is recognized when the power is produced and delivered to the customer under the terms defined in the Power Purchase Agreements. Renewable Energy Credits (“RECs”) Currently, the Company operates three plants that produce renewable energy that creates a right to a REC. The Company earns one REC for each megawatt hour produced from the geothermal power plant. The Company considers the RECs to be an inventory item held for sale, and outputs that are an economic benefit obtained directly through the operation of the plants. The Company does not currently hold any RECs for our own use. Revenues from RECs sales are recognized when the Company has met the terms and conditions of certain energy sales agreements with a financially capable buyer. At Raft River Energy I LLC, each REC is certified by the Western Electric Coordinating Council and sold under a REC Purchase and Sales Agreement to Holy Cross Energy. At San Emidio and Neal Hot Springs, the RECs are owned by our customer and are bundled with energy sales. At all three plants, title for the RECs pass during the same month as energy sales. As a result, costs associated with the sale of RECs are not segregated on the statement of operations. Revenue Source All of the Company’s operating revenues (energy sales and energy credit sales) originate from energy production from its interests in geothermal power plants located in the states of Idaho, Oregon and Nevada. Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses, total assets, or stockholders’ equity as previously reported. Recent Accounting Pronouncements Management has considered all recent accounting pronouncements, and no pronouncements were determined to have a significant impact on the financial statements that have not been disclosed in prior reporting periods.

Accounting Method The Company’s consolidated financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied in the preparation of the consolidated financial statements.

Use of Estimates The preparation of consolidated financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the consolidated financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of the Company’s consolidated financial position and consolidated results of operations.

Cash and Cash Equivalents The Company considers all unrestricted cash, short-term deposits, and other investments with original maturities of no more than ninety days when acquired to be cash and cash equivalents for the purposes of the statement of cash flows. Under the Loan Guarantee Agreement at Neal Hot Springs with the Department of Energy, all funds for USG Oregon LLC are deposited into PNC Bank subject to certain procedural restrictions on use of the funds. At March 31, 2013, $9.0 million in funds were deposited at PNC Bank and unavailable for immediate corporate needs. Discussion regarding restricted cash is included in Note 3.

Accounts Receivable Allowance for Doubtful Accounts Trade Accounts Receivable Management estimates the amount of trade accounts receivable that may not be collectible and records an allowance for doubtful accounts, accordingly. The allowance is an estimate based upon aging of receivable balances, historical collection experience, and the periodic credit evaluations of our customers’ financial condition. Receivable balances are written off when we determine that the balance is uncollectible. As of March 31, 2013 and December 31, 2012, there were no balances that were over 90 days past due and no balance in allowance for doubtful accounts was recognized. Grant Accounts Receivable For receivables expected to be received from grants from Federal or State agencies, the Company records the receivable amounts net of the funds expected to be received which may be less than the total amounts requested on the actual grant applications. Therefore, no allowance accounts are considered to be necessary for receivables from grants at March 31, 2013 and December 31, 2012.

Concentration of Credit Risk The Company’s cash and cash equivalents, including restricted cash, consisted of commercial bank deposits, money market accounts, and petty cash. Cash deposits are held in commercial banks in Boise, Idaho and Portland, Oregon. Deposits are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per legal entity through December 31, 2013. At March 31, 2013, the Company’s total cash balance, excluding money market funds, was $18,460,774, and bank deposits amounted to $18,478,730. The difference was due to outstanding checks and deposits. Of the bank deposits, $17,383,414 was not covered by or was in excess of FDIC insurance guaranteed limits. At fiscal year end, the Company’s money market funds invested in government backed securities totaled $997,980 and were not subject to deposit insurance.

Equity Securities The Company determines the appropriate classification of marketable securities at the time of purchase and reevaluates this designation as of each balance sheet date. The Company classifies these securities as either held-to-maturity, trading, or available-for-sale. All marketable securities and restricted investments were classified as available-for-sale securities. The Company classifies its investments as “available for sale” because it does not intend to actively buy and sell for short-term profits. The Company's investments are subject to market risk, primarily interest rate and credit risk. The fair value of investments is determined using observable or quoted market prices for those securities. Available-for-sale securities are carried at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive income (loss). Realized gains and losses, declines in value judged to be other than temporary and interest on available-for-sale securities are included in net income. The cost of securities sold is based on the specific identification method.

Property, Plant and Equipment Property, plant and equipment, including assets under capital lease, are recorded at historical cost. Costs of acquisition of geothermal properties are capitalized in the period of acquisition. Major improvements that significantly increase the useful lives and/or capabilities of the assets are capitalized. A primary factor in determining whether to capitalize construction type costs is the stage of the potential project’s development. Once a project is determined to be commercially viable, all costs directly associated with the development and construction of the project are capitalized. Until that time, all development costs are expensed. A commercially viable project will have, among other factors, a reservoir discovery well or other significant geothermal surface anomaly, a power transmission path that is identified and available, and an electricity off-taker identified. A valid reservoir discovery is generally defined when a test well has been substantially completed that indicates the presence of a geothermal reservoir that has a high probability of possessing the necessary temperatures, permeability, and flow rates. After a valid discovery has been made, the project enters the development stage. Generally, all costs incurred during the development stage are capitalized and tracked on an individual project basis. If a geothermal project is abandoned, the associated costs that have been capitalized are charged to expense in the year of abandonment. Expenditures for repairs and maintenance are charged to expense as incurred. Interest costs incurred during the construction period of defined major projects from debt that is specifically incurred for those projects are capitalized. Funds received from grants associated with capital projects reduce the cost of the asset directly associated with the individual grants. The offset of the cost of the asset associated with grant proceeds is recorded in the period when the requirements of the grant are substantially complete and the amount can be reasonably estimated. Direct labor costs, incurred for specific major projects expected to have long-term benefits will be capitalized. Direct labor costs subject to capitalization include employee salaries, as well as, related payroll taxes and benefits. With respect to the allocation of salaries to projects, salaries are allocated based on the percentage of hours that our key managers, engineers and scientists work on each project and are invoiced to the project each month. These individuals track their time worked at each project. Major projects are, generally, defined as projects expected to exceed $100,000. Direct labor includes all of the time incurred by employees directly involved with construction and development activities. General and/or indirect management time and time spent evaluating the feasibility of potential projects are expensed when incurred. Employee training time is expensed when incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset. Where appropriate, terms of property rights and revenue contracts can influence the determination of estimated useful lives. Estimated useful lives by major asset categories are summarized as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="70%"> <tr valign="top"> <td align="left"> </td> <td align="center" width="50%">Estimated Useful</td> </tr> <tr valign="top"> <td align="left" style="BORDER-BOTTOM: #000000 1px solid">                                 Asset Categories</td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="50%">Lives in Years</td> </tr> <tr> <td> </td> <td width="50%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Furniture, vehicle and other equipment</td> <td align="center" bgcolor="#e6efff" width="50%"> 3 to 5 </td> </tr> <tr valign="top"> <td align="left">Power plant, buildings and improvements</td> <td align="center" width="50%"> 3 to 30 </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Wells</td> <td align="center" bgcolor="#e6efff" width="50%"> 30 </td> </tr> <tr valign="top"> <td align="left">Well pumps and components</td> <td align="center" width="50%"> 5 to 15 </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Pipelines</td> <td align="center" bgcolor="#e6efff" width="50%"> 30 </td> </tr> <tr valign="top"> <td align="left">Transmission lines</td> <td align="center" width="50%"> 30 </td> </tr> </table> </div>

Intangible Assets All costs directly associated with the acquisition of geothermal and surface water rights are capitalized as intangible assets. These costs are amortized over their estimated utilization period. There are several factors that influence the estimated utilization periods as well as underlying fair value that include, but are not limited to, the following: <ul style="TEXT-ALIGN: justify"> <li style="font-family: times new roman,times,serif; font-size: 10pt;">contractual expiration terms of the right,</li> <li style="font-family: times new roman,times,serif; font-size: 10pt;">contractual terms of an associated revenue contract (i.e., PPA’s),</li> <li style="font-family: times new roman,times,serif; font-size: 10pt;">compliance with utilization and other requirements, and</li> <li style="font-family: times new roman,times,serif; font-size: 10pt;">hierarchy of other right holders who share the same resource.</li> </ul> Currently, amortization expense is being calculated on a straight-line basis over an estimated utilization period of 30 years for assets placed in service. If an intangible water or geothermal right is forfeited or otherwise lost, the remaining unamortized costs are expensed in the period of forfeiture. An impaired right is reduced to its estimated fair market value in the year the impairment is realized. Costs incurred that extend the term of an intangible right are capitalized and amortized over the new estimated period of utilization.

Impairment of Long-Lived Assets The Company evaluates its long-term assets annually for impairment and when circumstances/events occur that may impact the fair value of the assets. An impairment loss would be recognized if the carrying amount of a capitalized asset is not recoverable and exceeds its fair value. The most recent assessment was performed based upon financial conditions and assumptions as of December 31, 2012, and there have not been any significant changes in financial conditions and assumptions subsequent to that assessment date. Management believes that there have not been any circumstances that have warranted the recognition of losses due to the impairment of long-lived assets.

Stock Options Granted to Employees and Non-employees The Company follows financial accounting standards that require the measurement of the value of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. For employees, directors and officers, the fair value of the awards are expensed over the vesting period. The current vesting period for all options is eighteen months. Non-employee stock-based compensation is granted at the Board of Director’s discretion to reward select consultants for exceptional performance. Prior to issuance of the awards, the Company was not under any obligation to issue the stock options. Subsequent to the award, the recipient was not obligated to perform any services. Therefore, the fair value of these options was expensed on the grant date, which was also the measurement date. Under the fair value recognition provisions, share-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period. Determining the fair value of share-based awards at the grant date requires judgment. In addition, judgment is also required in estimating the amount of share-based awards that are expected to be forfeited. If actual results differ significantly from these estimates, stock-based compensation expense and our results of operations could be materially impacted.

Stock Based Compensation Granted to Employees The Company recognizes the value of common stock granted to employees and directors over the periods in which the services are received. The value of those services is based upon the estimated fair value of the common stock to be awarded. Estimated fair value is adjusted each reporting period. At the end of each vesting period, estimated fair value is adjusted to fair market value. The adjustment is reflected in the reporting period in which the vesting occurs.

Earnings (Losses) Per Share The Company follows financial accounting standards, which provides for calculation of "basic" and "diluted" earnings (losses) per share. Basic earnings per share includes no dilution and is computed by dividing net income available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. Although there were common stock equivalents outstanding at March 31, 2012, they were not included in the calculation of the loss per share because their inclusion would have been considered anti-dilutive. Both basic and diluted were presented for the calculation of the income per share for the three months ended March 31, 2013. Total common stock equivalents on a fully diluted basis at March 31, 2013 and 2012 were 122,768,560 and 97,906,612 ; respectively.

Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, trade account and other receivables, refundable tax credits, and accounts payable and accrued liabilities. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values, unless otherwise noted. The Company’s functional currency is the U.S. dollar. Monetary items are converted into U.S. dollars at the rate prevailing at the balance sheet date. Resulting gains and losses are generally included in determining net income for the period in which exchange rates change.

Revenue Revenue Recognition Energy Sales The energy sales revenue is recognized when the power is produced and delivered to the customer under the terms defined in the Power Purchase Agreements. Renewable Energy Credits (“RECs”) Currently, the Company operates three plants that produce renewable energy that creates a right to a REC. The Company earns one REC for each megawatt hour produced from the geothermal power plant. The Company considers the RECs to be an inventory item held for sale, and outputs that are an economic benefit obtained directly through the operation of the plants. The Company does not currently hold any RECs for our own use. Revenues from RECs sales are recognized when the Company has met the terms and conditions of certain energy sales agreements with a financially capable buyer. At Raft River Energy I LLC, each REC is certified by the Western Electric Coordinating Council and sold under a REC Purchase and Sales Agreement to Holy Cross Energy. At San Emidio and Neal Hot Springs, the RECs are owned by our customer and are bundled with energy sales. At all three plants, title for the RECs pass during the same month as energy sales. As a result, costs associated with the sale of RECs are not segregated on the statement of operations. Revenue Source All of the Company’s operating revenues (energy sales and energy credit sales) originate from energy production from its interests in geothermal power plants located in the states of Idaho, Oregon and Nevada.

Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses, total assets, or stockholders’ equity as previously reported.

Recent Accounting Pronouncements Management has considered all recent accounting pronouncements, and no pronouncements were determined to have a significant impact on the financial statements that have not been disclosed in prior reporting periods.

NOTE 3 – RESTRICTED CASH The Company maintains cash balances that are restricted under Letter of Credit covenants for State and Federal well bonding requirements. These bonds renew on an annual basis. Restricted cash balances and explanations of the nature of the restrictions are summarized as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">March 31,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" style="BORDER-BOTTOM: #000000 1px solid">                                                               Agency</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Idaho Department of Water Resources, Geothermal Well Bond</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 260,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 260,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Bureau of Land Management, Geothermal Lease Bond – Gerlach Geothermal</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 10,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 10,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">State of Nevada Division of Minerals, Statewide Drilling Bond</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 50,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 50,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Bureau of Land Management, Geothermal Lease Bonds</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 150,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 150,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Oregon Department of Geology and Mineral Industries, Mineral Land and Reclamation Program</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 400,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 400,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">U.S. Department of Energy – Construction Loan Bond</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 2,125,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 2,125,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 2,995,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 2,995,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> The well bonding requirements ensure that the Company has sufficient financial resources to construct, operate and maintain geothermal wells while safeguarding subsurface, surface and atmospheric resources from unreasonable degradation, and to protect ground water aquifers and surface water sources from contamination. Other future costs of environmental remediation cannot be reasonably estimated and have not been recorded. The construction bond is required by the Loan Guarantee Agreement with the Department of Energy at Neal Hot Springs and will convert to a plant reserve fund upon completion of the plant facility.

260000 260000 10000 10000 50000 50000 150000 150000 400000 400000 2125000 2125000 2995000 2995000

NOTE 4 – GRANT PROCEEDS RECEIVABLE USG Nevada LLC The Company submitted an application on July 17, 2012, to the United States Department of Treasury for an ITC cash grant for approximately $11.70 million. During the review process, the Company reduced the requested amount to $10.65 million to expedite the collection of the undisputed amount. The reduced (undisputed) amount of the requested funds was collected in November 2012. In March 2013, the remaining cash grant balance of $1.05 million, for items included in the original submission, was received from the Treasury. The total proceeds from this grant offset the construction costs of the new power plant located in San Emidio, Nevada that was placed into service for financial reporting purposes on September 1, 2012. As of March 31, 2013, all proceeds due under this cash grant had been received. USG Oregon LLC The Company submitted an application for an ITC cash grant (“ITC grant”) to the United States Department of Treasury in the first quarter of 2013 and submitted an application to Oregon Department of Energy for a Business Energy Tax Credit (“BETC”) for qualified construction purchases related to the project located at Neal Hot Springs, Oregon. Proceeds on the ITC grant request were expected to total $35,520,000, based upon an estimated amount of qualified expenditures. This amount was reduced by 8.7% to $32,749,541 by the federal sequestration. The Company expects to receive $7,364,200 from the BETC program and has based this estimate upon approved expenditures and rates as stated on the Final Conditional Certificate received on December 31, 2012 from the Oregon Department of Energy, and was completed after the plant inspection that was conducted in February 2013. To complete the sale of the BETC credit, the Company must obtain a pass through partner. These receivable amounts reflect the Company’s estimate of the total eligible costs that have been incurred prior to year end. The estimated net proceeds from the grants have been used to offset the construction costs of the power plant. The Neal Hot Springs, Oregon plant became commercially operational on November 16, 2012. All of the proceeds are expected to be collected in the calendar year ended December 31, 2013.

11700000 10650000 1050000 35520000 0.087 32749541 7364200

NOTE 5 – INVESTMENT IN EQUITY SECURITIES Investments in equity securities ( 150,000 shares of Alterra Power Corp, a publicly traded renewable energy company) activities consisted of the following: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="80%"> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="12%">Amount</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Available-for-sale equity securities:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">         Cost basis</td> <td align="left" width="1%">$</td> <td align="right" width="12%"> 88,515 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">                 Net unrealized losses</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> (22,355 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> </tr> <tr valign="top"> <td align="left">                   Foreign exchange losses</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (609 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">         Fair value at December 31, 2012</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 65,551 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">                   Net unrealized losses</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> (18,293 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> </tr> <tr valign="top"> <td align="left">                   Foreign exchange losses</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (1,372 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">         Fair value at March 31, 2013</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 45,886 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div>

88515 -22355 -609 65551 -18293 -1372 45886 150000

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT During the three months ended March 31, 2013, the remaining balance of the ITC cash grant related to previously disputed expenditures of approximately $1.05 million was collected. On February 15, 2013, the Company signed a settlement agreement with SAIC (the general contractor and construction loan holder) that reduced the construction liability including construction cost and accrued interest by approximately $2.14 million for the San Emidio, Nevada project. These items reduced the carrying cost of the new San Emidio plant in the current reporting period. Property, plant and equipment, at cost, are summarized as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">March 31,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Land</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 1,603,509 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 1,603,509 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Power production plant</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 158,482,959 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 159,795,806 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Grant proceeds for power plants</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> (52,965,236 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> (54,684,452 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> </tr> <tr valign="top"> <td align="left">Wells</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 66,650,807 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 66,619,604 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Grant proceeds for wells</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> (2,487,773 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> (2,487,773 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> </tr> <tr valign="top"> <td align="left">Furniture and equipment</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 1,404,410 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 1,356,143 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 172,688,676 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 172,202,837 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">           Less: accumulated depreciation</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (16,117,744 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (14,491,277 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 156,570,932 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 157,711,260 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Construction in progress</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 2,925,903 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 2,877,994 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 159,496,835 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 160,589,254 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div> The Company capitalized interest costs as a component of the Neal Hot Springs and San Emidio projects as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="27%">For the Three Months Ended March 31,</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Total interest expense incurred</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 481,769 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 574,901 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Capitalized interest</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 573,426 </td> <td align="left" width="2%"> </td> </tr> </table> </div> Depreciation expense charged to plant operations and administrative expenses for the following the three months ended March 31, 2013 and 2012 was $1,626,467 and $667,472 ; respectively. Changes in Construction in Progress are summarized as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">For the Nine</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">For the Three</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Months Ended</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Months Ended</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">March 31, 2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Beginning balances</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 2,877,994 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 145,987,128 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Development/construction</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 47,909 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 64,564,914 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Grant reimbursements and rebates</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> (55,244,491 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> </tr> <tr valign="top"> <td align="left">     Transfers into production</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (152,429,557 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Ending balances</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 2,925,903 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 2,877,994 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div> Construction in Progress, at cost, consisted of the following projects/assets by location are as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">March 31,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Raft River, Idaho:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">         Unit II, power plant, substation and transmission lines</td> <td align="left" width="1%">$</td> <td align="right" width="12%"> 750,493 </td> <td align="left" width="2%"> </td> <td align="left" width="1%">$</td> <td align="right" width="12%"> 750,493 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">         Unit II, well construction</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 2,102,168 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 2,100,862 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 2,852,661 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 2,851,355 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Neal Hot Springs, Oregon:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">         Wells</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 73,242 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 26,639 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 2,925,903 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 2,877,994 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div>

1603509 1603509 158482959 159795806 -52965236 -54684452 66650807 66619604 -2487773 -2487773 1404410 1356143 172688676 172202837 -16117744 -14491277 156570932 157711260 2925903 2877994 159496835 160589254 <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="27%">For the Three Months Ended March 31,</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Total interest expense incurred</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 481,769 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 574,901 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Capitalized interest</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 573,426 </td> <td align="left" width="2%"> </td> </tr> </table> 481769 574901 0 573426 <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">For the Nine</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">For the Three</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Months Ended</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Months Ended</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">March 31, 2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Beginning balances</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 2,877,994 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 145,987,128 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Development/construction</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 47,909 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 64,564,914 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Grant reimbursements and rebates</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> (55,244,491 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> </tr> <tr valign="top"> <td align="left">     Transfers into production</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (152,429,557 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Ending balances</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 2,925,903 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 2,877,994 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> 2877994 145987128 47909 64564914 0 -55244491 0 -152429557 2925903 2877994 <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">March 31,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Raft River, Idaho:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">         Unit II, power plant, substation and transmission lines</td> <td align="left" width="1%">$</td> <td align="right" width="12%"> 750,493 </td> <td align="left" width="2%"> </td> <td align="left" width="1%">$</td> <td align="right" width="12%"> 750,493 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">         Unit II, well construction</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 2,102,168 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 2,100,862 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 2,852,661 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 2,851,355 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Neal Hot Springs, Oregon:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">         Wells</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 73,242 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 26,639 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 2,925,903 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 2,877,994 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> 750493 750493 2102168 2100862 2852661 2851355 73242 26639 2925903 2877994 1050000 2140000 1626467 667472

NOTE 7 – INTANGIBLE ASSETS Intangible assets, at cost, are summarized by project location as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">March 31,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">In operation:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     San Emidio, Nevada:</td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Geothermal water and mineral rights</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 4,825,220 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 4,825,220 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">             Less: accumulated amortization</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (827,467 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (765,147 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 3,997,753 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 4,060,073 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Inactive:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Raft River, Idaho:</td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Surface water rights</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 146,342 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 146,342 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">             Geothermal water and mineral rights</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 1,251,540 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 1,251,540 </td> <td align="left" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Granite Creek, Nevada:</td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Surface water rights</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 451,299 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 451,299 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Neal Hot Springs, Oregon:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">             Geothermal water and mineral rights</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 625,337 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 625,337 </td> <td align="left" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Guatemala City, Guatemala:</td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Geothermal water and mineral rights</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 625,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 625,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Gerlach, Nevada:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">             Geothermal water and mineral rights</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 997,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 997,000 </td> <td align="left" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     San Emidio, Nevada:</td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Surface water rights</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 4,323,520 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 4,323,520 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">             Geothermal water and mineral rights</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 3,440,580 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 3,440,580 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Less: prior accumulated amortization</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (430,073 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (430,073 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 11,430,545 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 11,430,545 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 15,428,298 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 15,490,618 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div> Amortization expense charged to plant operations during the three months ended March 31, 2013 and 2012 was $62,320 and $49,768 ; respectively. Estimated aggregate amortization expense for the next five years is as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="70%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Projected</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">Amounts</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Years ending December 31,</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">                    20 13</td> <td align="left" width="1%">$</td> <td align="right" width="12%"> 120,630 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">                    2014</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 160,840 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">                    2015</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 160,840 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">                    2016</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 160,840 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">                    2017</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 160,840 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 763,990 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div>

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">March 31,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">In operation:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     San Emidio, Nevada:</td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Geothermal water and mineral rights</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 4,825,220 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 4,825,220 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">             Less: accumulated amortization</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (827,467 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (765,147 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 3,997,753 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 4,060,073 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Inactive:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Raft River, Idaho:</td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Surface water rights</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 146,342 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 146,342 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">             Geothermal water and mineral rights</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 1,251,540 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 1,251,540 </td> <td align="left" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Granite Creek, Nevada:</td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Surface water rights</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 451,299 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 451,299 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Neal Hot Springs, Oregon:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">             Geothermal water and mineral rights</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 625,337 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 625,337 </td> <td align="left" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Guatemala City, Guatemala:</td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Geothermal water and mineral rights</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 625,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 625,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Gerlach, Nevada:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">             Geothermal water and mineral rights</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 997,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 997,000 </td> <td align="left" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     San Emidio, Nevada:</td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Surface water rights</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 4,323,520 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 4,323,520 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">             Geothermal water and mineral rights</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 3,440,580 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 3,440,580 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">             Less: prior accumulated amortization</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (430,073 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (430,073 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 11,430,545 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 11,430,545 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 15,428,298 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 15,490,618 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table>

4825220 4825220 -827467 -765147 3997753 4060073 146342 146342 1251540 1251540 451299 451299 625337 625337 625000 625000 997000 997000 4323520 4323520 3440580 3440580 -430073 -430073 11430545 11430545 15428298 15490618

120630 160840 160840 160840 160840 763990 62320 49768

NOTE 8 – PROVISION FOR INCOME TAXES Income taxes are provided based upon the liability method. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by accounting standards to allow recognition of such an asset. At March 31, 2013, the Company had net deferred tax assets calculated at an expected rate, noted in the table below, of approximately $10,561,000 (December 31, 2012 - $11,109,000). As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset was recorded at March 31, 2013 and December 31, 2012. During the quarter ended March 31, 2013, the Company engaged a tax matters consultant to evaluate the value and timing of adjusting the deferred tax valuation allowance. The Company anticipates that any tax obligations will be fully offset by the utilization of prior reserved deferred tax benefits for the year ended December 31, 2013. The significant components of the net deferred tax asset calculated with the estimated effective income tax rate at March 31, 2013 and December 31, 2012 were as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">March 31,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Deferred tax assets*:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">       Net operating loss carry forward</td> <td align="left" width="1%">$</td> <td align="right" width="12%"> 12,774,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%">$</td> <td align="right" width="12%"> 12,608,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">       Stock based compensation</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 1,640,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 1,532,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Deferred tax liabilities*:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">         Depreciation and amortization</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (3,853,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (3,031,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Net deferred income tax asset</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 10,561,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 11,109,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Deferred tax asset valuation allowance</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (10,561,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (11,109,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="12%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Net deferred tax asset</td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%">   - </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%">   - </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div> * - significant components of deferred assets and liabilities are considered to be long-term. The Company’s estimated effective income tax rate is summarized as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="27%">For the Years Ended December 31,</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">U.S. Federal statutory rate</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 34.0% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 34.0% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Average State income tax, net of federal tax effect</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 4.2 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 4.2 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Production tax credits</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> - </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> (2.0 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="left">         Net effective tax rate</td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 38.2% </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 36.2% </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div> At March 31, 2013, the Company had net income tax operating loss carry forwards of approximately $33,439,000 ($34,829,000 in December 31, 2012), which expire in the years 2023 through 2033. The change in the allowance account from December 31, 2012 to March 31, 2013 was a decrease of $548,000 for the anticipated deferred tax allocations based on 2013 income. The difference of $305,800 between the effect on deferred income tax of $853,800 and the decrease in net deferred income tax asset of $548,000 consisted of the deflating effect of $858,800 from the current period book to income tax depreciation and the inflating effect of $553,000 from the change in estimated effective tax rate. At December 31, 2013, Raft River Energy I LLC has a book-to-tax difference of $35.7 million due to the acceleration of intangible drilling costs and depreciation. By contract, 99% percent of this book-to-tax difference has been allocated to the non-controlling interest and would not be available to the consolidated group to offset future tax liabilities. Although Management believes that its estimates are reasonable, no assurance can be given that the final tax outcome of these matters will not be different than that which is reflected in our tax provisions. Ultimately, the actual tax benefits to be realized will be based upon future taxable earnings levels, which are very difficult to predict. Accounting for Income Tax Uncertainties and Related Matters The Company may be assessed penalties and interest related to the underpayment of income taxes. Such assessments would be treated as a provision of income tax expense on the financial statements. For the nine months ended December 31, 2012 and the fiscal years ended March 31, 2012 and 2011, no income tax expense has been realized as a result of operations and no income tax penalties and interest have been accrued related to uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and in the States of Idaho and Oregon. These filings are subject to a three year statute of limitations. The Company’s evaluation of income tax positions included the nine months ended December 31, 2012 and the fiscal years ended March 31, 2012 and 2011 could be subject to agency examinations as of December 31, 2012. No filings are currently under examination. No adjustments have been made to reduce the estimated income tax benefit at fiscal year end. Any valuations relating to these income tax provisions will comply with U.S. generally accepted accounting principles .

12774000 12608000 1640000 1532000 -3853000 -3031000 10561000 11109000 -10561000 -11109000 0 0

0.34 0.34 4.2 4.2 0 -2 0.382 0.362 10561000 11109000 33439000 34829000 548000 305800 853800 548000 858800 553000 35700000 0.99

NOTE 9 - CAPITAL LEASE OBLIGATIONS Effective May 10, 2012, the Company entered into two capital lease obligations for the purchase of a boom lift and a telehandler from Caterpillar Financial Services Corporation. The boom lift contract is payable in 36 monthly payments of $1,094 that began on June 11, 2012 and has an effective annual interest rate of 5.985%. The telehandler contract is payable in 36 monthly payments of $3,155 that began on June 11, 2012 and has an effective annual interest rate of 6.14%. Both contracts with Caterpillar Financial Services Corporation have bargain purchase options at the end of the contracts scheduled for May 2015. The scheduled future lease payments for the three contracts are presented as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="60%"> <tr valign="top"> <td align="center"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="20%">Capital Leases</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" style="BORDER-BOTTOM: #000000 1px solid">Years ending December 31,</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="20%">Amounts</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2013</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="20%"> 50,997 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">2014</td> <td align="left" width="1%"> </td> <td align="right" width="20%"> 50,997 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2015</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="20%"> 8,500 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="center">Total future payments</td> <td align="left" width="1%"> </td> <td align="right" width="20%"> 110,494 </td> <td align="left" width="2%"> </td> </tr> <tr> <td align="center" bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="20%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">Less: imputed interest portion</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="20%"> (7,260 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%">)</td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="20%"> 103,234 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> <tr> <td align="center"> </td> <td width="1%"> </td> <td width="20%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">Allocation of capital lease obligations:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="20%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">Current portion</td> <td align="left" width="1%">$</td> <td align="right" width="20%"> 45,962 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">Long-term portion</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="20%"> 57,272 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="center"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="20%"> 103,234 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div> At March 31, 2013, the net book value of the equipment under capital lease amounted to $116,211 ($155,000, less $38,789 accumulated amortization).

50997 50997 8500 110494 -7260 103234 45962 57272 103234 36 1094 0.05985 36 3155 0.0614 116211 155000 38789 NOTE 10 – CONVERTIBLE NOTE PAYABLE On August 5, 2011, the Oregon USG Holdings, LLC (“Oregon Holdings”), a subsidiary of the Company, signed a convertible note agreement with the other equity partner (Enbridge Inc.). The principal of the loan totaled $2,125,000, and will accrue interest at a rate of 4.75% per annum. The loan balance plus accrued interest will convert to an equity interest in Oregon Holdings upon the earliest of a conversion event or April 1, 2014. Conversion events include the collection of grant funds by the Project. The converted balance would increase Enbridge Inc.’s ownership at a ratio of 1.5% for each $1 million contributed. In April 2013, the grant funds were collected and the note balance and all accrued interest is considered to be due; therefore, the loan balance of $2,125,000 is considered to short-term at March 31, 2013. See note 18. 2125000 0.0475 0.015 1000000 2125000 NOTE 11 – CONSTRUCTION NOTES PAYABLE U.S. Department of Energy On August 31, 2011, USG Oregon LLC (“USG Oregon”), a subsidiary of the Company, completed the first funding drawdown associated with the U.S. Department of Energy (“DOE”) $96.8 million loan guarantee (the “Loan Guarantee”) to construct its planned power plant at Neal Hot Springs in Eastern Oregon (the “Project”). The U.S. Treasury’s Federal Financing Bank, as lender for the Project, issues payments direct to vendors. Future advances covered by the Loan Guarantee will carry interest at a rate of 0.375% per annum over the U.S. Treasury bill rate of comparable maturities as of the date of each advance. All advances will be made under the Future Advance Promissory Note (“the Note”) dated February 23, 2011. The maximum principal amount of the Note is approximately $93.8 million. No advances may be made under the Note after July 31, 2013. Upon the occurrence and continuation of an event of default under the transaction documents, all amounts payable under the Note may be accelerated. In connection with the Loan Guarantee, the DOE has been granted a security interest in all of the equity interests of USG Oregon, as well as in the assets of USG Oregon, including a mortgage on real property interests relating to the Project site. The estimated current portion of the loan balance at March 31, 2013 was $866,342. Loan advances and effective annual interest rates are details as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Annual Interest</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" style="BORDER-BOTTOM: #000000 1px solid">                               Description</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">Amount</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">Rate %</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Advances by date:</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     August 31, 2011</td> <td align="left" width="1%">$</td> <td align="right" width="12%"> 2,328,422 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 2.997 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     September 28, 2011</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 10,043,467 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 2.755 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     October 27, 2011</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 3,600,026 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 2.918 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     December 2, 2011</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 4,377,079 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 2.795 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     December 21, 2011</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 2,313,322 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 2.608 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     January 25, 2012</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 8,968,019 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 2.772 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     April 26, 2012</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 13,029,325 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 2.695 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     May 30, 2012</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 19,497,204 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 2.408 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     August 27, 2012</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 7,709,454 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 2.360 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     December 28, 2012</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 2,567,121 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 2.396 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 74,433,439 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="12%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Interest paid by loan</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 1,085,854 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Loan balance at March 31, 2013</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 75,519,293 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="left" bgcolor="#e6efff" width="12%"> </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> </table> </div> Based upon the terms of applicable agreements and expected conditions that may impact some of those terms, the estimated annual principal payments were calculated as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="60%"> <tr valign="top"> <td align="center">For the Year Ended</td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="20%">Principal</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" style="BORDER-BOTTOM: #000000 1px solid">     December 31,</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="20%">Payments</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2013</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="20%"> 866,342 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">2014</td> <td align="left" width="1%"> </td> <td align="right" width="20%"> 3,402,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2015</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="20%"> 3,421,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">2016</td> <td align="left" width="1%"> </td> <td align="right" width="20%"> 3,421,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2017</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="20%"> 3,421,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">Thereafter</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="20%"> 60,987,951 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="20%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="20%"> 75,519,293 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div> SAIC Constructors LLC Effective August 27, 2010, the Company’s wholly owned subsidiary (USG Nevada LLC) signed a construction loan agreement with SAIC Constructors LLC (“SAIC”). The new 9.0 net megawatt power plant was considered complete and operational for financial reporting purposes on September 1, 2012. Interest accrued on the outstanding balance at 9.5% per annum. On February 15, 2013, USG Nevada LLC signed a settlement agreement with SAIC. The settlement agreement reduced the construction cost and accrued interest liability incurred under the construction loan agreement from approximately $31.1 million to $29,525,000. The agreement defines the remaining liability as consisting of three components. The first component is a $1.0 million non-interest bearing note to be repaid in three monthly payments of $333,333 beginning February 28, 2013. The second component is a $2 million obligation that is to be repaid in quarterly installments of $119,382, including interest at 7.0% per annum to begin July 31, 2013. The third component is a balloon payment of $26,525,000 due upon obtaining long-term permanent financing. At March 31, 2013, the loan balances totaled $28,858,334 ($27,815,000 long-term, $710,000 calculated short term portion and $333,334 short-term note). Since the long-term financing agreement for the major component of the obligation has not been finalized, a 5 year maturities schedule was not presented. The long-term replacement loan is expected be repaid over up to a 25 year term, plus interest incurred at approximate annual interest rate between 7.0% and 7.5%.

2328422 2.997 10043467 2.755 3600026 2.918 4377079 2.795 2313322 2.608 8968019 2.772 13029325 2.695 19497204 2.408 7709454 2.360 2567121 2.396 74433439 1085854 75519293 <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="60%"> <tr valign="top"> <td align="center">For the Year Ended</td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="20%">Principal</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" style="BORDER-BOTTOM: #000000 1px solid">     December 31,</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="20%">Payments</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2013</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="20%"> 866,342 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">2014</td> <td align="left" width="1%"> </td> <td align="right" width="20%"> 3,402,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2015</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="20%"> 3,421,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">2016</td> <td align="left" width="1%"> </td> <td align="right" width="20%"> 3,421,000 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2017</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="20%"> 3,421,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">Thereafter</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="20%"> 60,987,951 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td bgcolor="#e6efff"> </td> <td bgcolor="#e6efff" width="1%"> </td> <td bgcolor="#e6efff" width="20%"> </td> <td bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="20%"> 75,519,293 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> 866342 3402000 3421000 3421000 3421000 60987951 75519293 96800000 0.00375 93800000 866342 9 0.095 31100000 29525000 1000000 333333 2000000 119382 0.07 26525000 28858334 27815000 710000 333334 5 25 0.07 0.075

NOTE 12 - CAPITAL STOCK The Company is authorized to issue 250,000,000 shares of common stock. All shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company. On December 21, 2012, the Company issued 11,810,816 common stock shares at $0.37 under a registered direct offering agreement with Kuhns Brothers Securities Corporation and collected $4,087,802, net of broker fees and other costs of $282,200. During the quarter ended September 30, 2012, the Company issued 1,250,000 common stock shares at prices between $0.312 and $0.355 under an At Market Issuance Sales agreement with Lincoln Park Capital. During the quarter ended June 30, 2012, the Company issued 3,375,503 common stock shares at prices between $0.341 and $0.536 under an At Market Issuance Sales agreement with Lincoln Park Capital. During the year ended March 31, 2012, the Company issued 76,500 common shares to employees of the Company upon exercise of stock options at a strike price of $1.00 CDN.

250000000 0.50 11810816 0.37 4087802 282200 1250000 0.312 0.355 3375503 0.341 0.536 76500 1.00

NOTE 13 - STOCK BASED COMPENSATION The Company has a stock incentive plan (the “Stock Incentive Plan”) for the purpose of attracting and motivating directors, officers, employees and consultants of the Corporation and advancing the interests of the Corporation. The Stock Incentive Plan is a 15% rolling plan approved by shareholders in December 2009, whereby the Company can grant options to the extent of 15% of the current outstanding common shares. Under the plan, all forfeited and exercised options can be replaced with new offerings. As of March 31, 2013, the Company can issue stock option grants totaling up to 15,227,515 shares. Options are granted for a term of up to five years from the date of grant. Stock options granted generally vest over a period of eighteen months, with 25% vesting on the date of grant and 25% vesting every six months thereafter. Effective April 1, 2007, all grants are stated in U.S. dollars. The Company recognizes compensation expense using the straight-line method of amortization. Historically, the Company has issued new shares to satisfy exercises of stock options and the Company expects to issue new shares to satisfy any future exercises of stock options. At March 31, 2013, the Company had 10,239,625 options granted and outstanding. On August 24, 2012, the Company granted 2,917,000 stock options to employees exercisable at a price of $0.31 until August 24, 2017. The following table reflects the summary of stock options outstanding at March 31, 2012 and changes during for the nine months ended December 31, 2012, and the three months ended March 31, 2013: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Weighted</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Average</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Weighted</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Number of</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Exercise</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Average</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Aggregate</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">shares under</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Price Per</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Fair</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Intrinsic</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">options</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Share</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Value</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Value</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Balance outstanding, March 31, 2012</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 7,975,125 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%"> 1.38 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%"> 0.70 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%"> 5,613,510 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Forfeited/Expired</td> <td align="left" width="1%"> </td> <td align="right" width="10%"> (652,500 </td> <td align="left" width="2%">)</td> <td align="left" width="1%"> </td> <td align="right" width="10%"> 2.41 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> 0.71 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> (460,975 </td> <td align="left" width="2%">)</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Exercised</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Granted</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> 2,917,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> 0.31 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> 0.16 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> 453,774 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Balance outstanding, December 31, 2012</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 10,239,625 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 0.91 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 0.55 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 5,606,309 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Forfeited/Expired</td> <td align="left" width="1%"> </td> <td align="right" width="10%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> - </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Exercised</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Granted</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Balance outstanding, March 31, 2013</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 10,239,625 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 0.91 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 0.55 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 5,606,309 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div> The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model using the assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock. The Company uses historical data to estimate option volatility within the Black-Scholes model. The expected term of options granted represents the period of time that options granted are expected to be outstanding, based upon past experience and future estimates and includes data from the Plan. The risk-free rate for periods within the expected term of the option is based upon the U.S. Treasury yield curve in effect at the time of grant. The Company currently does not foresee the payment of dividends in the near term. The fair value of the stock options granted was estimated using the Black-Scholes option-pricing model and is amortized over the vesting period of the underlying options. The assumptions used to calculate the fair value are as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Three Months</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Nine Months</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Ended March 31,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">Ended December</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">31, 2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Dividend yield</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 0 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 0 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Expected volatility</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 65 - 70% </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 65 - 70% </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Risk free interest rate</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 0.19 - 0.33% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="12%"> 0.19 - 0.33% </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Expected life (years)</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 3.17 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 3.17 </td> <td align="left" width="2%"> </td> </tr> </table> </div> Changes in the subjective input assumptions can materially affect the fair value estimate and, therefore, the existing models do not necessarily provide a reliable measure of the fair value of the Company’s stock options. The following table summarizes information about the stock options outstanding at March 31, 2013: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="center" colspan="6" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid"> OPTIONS OUTSTANDING </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" nowrap="nowrap"> </td> <td align="left" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> REMAINING </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> NUMBER OF </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap"> EXERCISE </td> <td align="left" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> NUMBER OF </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> CONTRACTUAL </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> OPTIONS </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid"> PRICE </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> OPTIONS </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> LIFE (YEARS) </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> EXERCISABLE </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> INTRINSIC VALUE </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> $2.22 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,465,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 0.13 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,465,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="17%"> 1,786,417 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center"> 1.78 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 95,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 0.49 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 95,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 81,172 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">   0.92 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,704,625 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1.15 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,704,625 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,204,713 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   1.58 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 68,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 1.48 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 68,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 26,435 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">   0.86 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,300,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 2.45 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,300,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 752,207 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center"> 0.83 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 2,590,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 3.18 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 2,590,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 1,269,100 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> 0.60 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 100,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 3.45 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 100,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 36,072 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   0.31 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 2,917,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 4.40 </td> <td align="left" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 1,458,500 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 226,888 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double"> $0.91 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 10,239,625 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 2.63 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 8,781,125 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 5,383,004 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> The following table summarizes information about the stock options outstanding at December 31, 2012: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="center" colspan="6" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid"> OPTIONS OUTSTANDING </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> REMAINING </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> NUMBER OF </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap"> EXERCISE </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> NUMBER OF </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> CONTRACTUAL </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> OPTIONS </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid"> PRICE </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> OPTIONS </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> LIFE (YEARS) </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> EXERCISABLE </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> INTRINSIC VALUE </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> $2.22 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,465,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 0.63 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,465,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="17%"> 1,786,417 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   1.78 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 95,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 0.74 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 95,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 81,172 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">   0.92 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,704,625 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1.40 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,704,625 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,204,713 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   1.58 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 68,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 1.73 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 68,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 26,435 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">   0.86 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,300,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 2.70 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,300,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 752,207 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   0.83 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 2,590,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 3.43 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 2,590,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 1,269,100 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">   0.60 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 100,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 3.70 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 75,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 27,054 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   0.31 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 2,917,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 4.65 </td> <td align="left" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 729,250 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 113,444 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double"> $0.91 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 10,239,625 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 2.80 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 8,026,875 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 5,260,542 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> A summary of the status of the Company’s nonvested stock options outstanding at March 31, 2012 and changes during the nine months ended December 31, 2012, and the three months ended March 31, 2013 are presented as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Weighted</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Weighted</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Average Grant</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Average</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Number of</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Date Fair Value</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Grant Date</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Options</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Per Share</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Fair Value</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Nonvested, March 31, 2012</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 1,345,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%"> 0.82 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%"> 0.49 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Granted</td> <td align="left" width="1%"> </td> <td align="right" width="10%"> 2,917,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> 0.31 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> 0.16 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Vested</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> (2,049,250 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 0.64 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 0.37 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Forfeited/Expired</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Nonvested, December 31, 2012</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 2,212,750 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 0.31 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 0.16 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Granted</td> <td align="left" width="1%"> </td> <td align="right" width="10%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> - </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Vested</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> (754,250 </td> <td align="left" bgcolor="#e6efff" width="2%">)</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 0.32 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 0.16 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Forfeited/Expired</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Nonvested, March 31, 2013</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 1,458,500 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 0.31 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 0.16 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> </div> As of March 31, 2013, there was $56,356 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 1.5 years. The total fair value of options vested at March 31, 2013 and 2012 was $59,362 and $225,276 ; respectively. Stock Compensation Plan (Restricted Shares ) On September 10, 2010, the Company granted officers, directors and select employees 705,000 common shares that will be distributed in three six-month vesting periods. The recipients meet the vesting requirements by maintaining employment and good standing with the Company through the vesting periods. After vesting, there are no restrictions on the shares. On March 10, 2011, the 705,000 common shares were issued to the recipients and held by the Company. All of these shares were considered to be issued and outstanding. On March 11, 2011, 235,000 common shares vested valued at $0.99 per share, and the shares were released to the qualified recipients. On September 11, 2011, 235,000 common shares vested valued at $0.60 per share and the shares were released to the qualified recipients. The final 235,000 shares valued at $0.58 vested and were released on March 11, 2012. Stock Purchase Warrants At March 31, 2013, the outstanding broker warrants and share purchase warrants consisted of the following: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left" nowrap="nowrap"> </td> <td align="left" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%">Broker</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" nowrap="nowrap"> </td> <td align="left" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%">Warrant</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%">Share</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%">Warrant</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" nowrap="nowrap"> </td> <td align="left" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%">Broker</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%">Exercise</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%">Purchase</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%">Exercise</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid">             Expiration Date</td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%">Warrants</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%">Price</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%">Warrants</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%">Price</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">September 16, 2015</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 246,285 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="17%"> 1.250 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 4,104,757 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="17%"> 1.250 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">May 31, 2017</td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 255,721 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 0.437 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> - </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">December 21, 2017</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 5,905,408 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 0.50 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> </table> </div> On March 4, 2012, 2,500,000 stock purchase warrants and 56,000 broker warrants at an exercise price of $1.075 expired without exercise.

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="90%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Weighted</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Average</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Weighted</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Number of</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Exercise</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Average</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Aggregate</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">shares under</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Price Per</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Fair</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="10%">Intrinsic</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">options</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Share</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Value</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Value</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Balance outstanding, March 31, 2012</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 7,975,125 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%"> 1.38 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%"> 0.70 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%"> 5,613,510 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Forfeited/Expired</td> <td align="left" width="1%"> </td> <td align="right" width="10%"> (652,500 </td> <td align="left" width="2%">)</td> <td align="left" width="1%"> </td> <td align="right" width="10%"> 2.41 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> 0.71 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> (460,975 </td> <td align="left" width="2%">)</td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Exercised</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Granted</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> 2,917,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> 0.31 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> 0.16 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> 453,774 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Balance outstanding, December 31, 2012</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 10,239,625 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 0.91 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 0.55 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> 5,606,309 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Forfeited/Expired</td> <td align="left" width="1%"> </td> <td align="right" width="10%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> - </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="10%"> - </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">     Exercised</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="10%"> - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">     Granted</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Balance outstanding, March 31, 2013</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 10,239,625 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 0.91 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 0.55 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 5,606,309 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table>

7975125 1.38 0.70 5613510 -652500 2.41 0.71 -460975 0 0 0 0 2917000 0.31 0.16 453774 10239625 0.91 0.55 5606309 0 0 0 0 0 0 0 0 0 0 0 0 10239625 0.91 0.55 5606309

0 0 0.65 0.70 0.65 0.70 0.0019 0.0033 0.0019 0.0033 3.17 3.17

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="center" colspan="6" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid"> OPTIONS OUTSTANDING </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" nowrap="nowrap"> </td> <td align="left" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> REMAINING </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> NUMBER OF </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap"> EXERCISE </td> <td align="left" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> NUMBER OF </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> CONTRACTUAL </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> OPTIONS </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid"> PRICE </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> OPTIONS </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> LIFE (YEARS) </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> EXERCISABLE </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> INTRINSIC VALUE </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> $2.22 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,465,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 0.13 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,465,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="17%"> 1,786,417 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center"> 1.78 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 95,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 0.49 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 95,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 81,172 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">   0.92 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,704,625 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1.15 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,704,625 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,204,713 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   1.58 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 68,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 1.48 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 68,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 26,435 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">   0.86 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,300,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 2.45 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,300,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 752,207 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center"> 0.83 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 2,590,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 3.18 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 2,590,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 1,269,100 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> 0.60 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 100,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 3.45 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 100,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 36,072 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   0.31 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 2,917,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 4.40 </td> <td align="left" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 1,458,500 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 226,888 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double"> $0.91 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 10,239,625 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 2.63 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 8,781,125 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 5,383,004 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table>

2.22 1465000 0.13 1465000 1786417 1.78 95000 0.49 95000 81172 0.92 1704625 1.15 1704625 1204713 1.58 68000 1.48 68000 26435 0.86 1300000 2.45 1300000 752207 0.83 2590000 3.18 2590000 1269100 0.60 100000 3.45 100000 36072 0.31 2917000 4.40 1458500 226888 0.91 10239625 2.63 8781125 5383004

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="center" colspan="6" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid"> OPTIONS OUTSTANDING </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> REMAINING </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> NUMBER OF </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap"> EXERCISE </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> NUMBER OF </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> CONTRACTUAL </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> OPTIONS </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid"> PRICE </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> OPTIONS </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> LIFE (YEARS) </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> EXERCISABLE </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> INTRINSIC VALUE </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="17%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> $2.22 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,465,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 0.63 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,465,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="17%"> 1,786,417 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   1.78 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 95,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 0.74 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 95,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 81,172 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">   0.92 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,704,625 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1.40 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,704,625 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,204,713 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   1.58 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 68,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 1.73 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 68,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 26,435 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">   0.86 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,300,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 2.70 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 1,300,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 752,207 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   0.83 </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 2,590,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 3.43 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 2,590,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 1,269,100 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">   0.60 </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 100,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 3.70 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 75,000 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="17%"> 27,054 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">   0.31 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 2,917,000 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 4.65 </td> <td align="left" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 729,250 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> 113,444 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double"> $0.91 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 10,239,625 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 2.80 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 8,026,875 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="17%"> 5,260,542 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table>

2.22 1465000 0.63 1465000 1786417 1.78 95000 0.74 95000 81172 0.92 1704625 1.40 1704625 1204713 1.58 68000 1.73 68000 26435 0.86 1300000 2.70 1300000 752207 0.83 2590000 3.43 2590000 1269100 0.60 100000 3.70 75000 27054 0.31 2917000 4.65 729250 113444 0.91 10239625 2.80 8026875 5260542

1345000 0.82 0.49 2917000 0.31 0.16 -2049250 0.64 0.37 0 0 0 2212750 0.31 0.16 0 0 0 -754250 0.32 0.16 0 0 0 1458500 0.31 0.16

246285 1.250 4104757 1.250 255721 0.437 0 0 0 0 5905408 0.50 0.15 0.15 15227515 0.25 0.25 10239625 2917000 0.31 56356 1.5 59362 225276 705000 705000 235000 0.99 235000 0.60 235000 0.58 2500000 56000 1.075

NOTE 14 – FAIR VALUE MEASUREMENT Current U.S. generally accepted accounting principles establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3 – Pricing inputs include significant inputs that are generally unobservable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. Level 3 instruments include those that may be more structured or otherwise tailored to the Company’s needs. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The following table discloses by level within the fair value hierarchy the Company’s assets and liabilities measured and reported on its Consolidated Balance Sheet as of March 31, 2013 at fair value on a recurring basis: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Total</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Level 1</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Level 2</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="10%">Level 3</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> Assets: </td> <td align="left" width="1%"> </td> <td align="left" width="10%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="10%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="10%"> </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="left" width="10%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Money market accounts</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%"> 997,980 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%"> 997,980 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%">   - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="10%">   - </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Investment in equity securities</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> 45,886 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> 45,886 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="10%"> - </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 1,043,866 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 997,980 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%"> 45,886 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="10%">   - </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> As allowed by current financial reporting standards, the Company has elected not to implement fair value recognition and reporting for all non-financial assets and non-financial liabilities, except for those that are recognized or disclosed at fair value in the financial statements on a recurring basis, that is, at least annually.

997980 997980 0 0 45886 0 45886 0 1043866 997980 45886 0

NOTE 15 - RELATED PARTY TRANSACTIONS At March 31, 2013 and December 31, 2012 the amounts of $6,093 and $2,087 ; respectively, were payable to the officers of the Company for routine expense reimbursement. These amounts are unsecured and due on demand. The Company paid directors’ fees in the amounts of $30,000 for both the three months ended March 31, 2013 and 2012.

6093 2087 30000

NOTE 16 - COMMITMENTS AND CONTINGENCIES Operating Lease Agreements The Company has entered into several lease agreements with terms expiring up to December 1, 2034 for geothermal properties in Washoe County Nevada; Republic of Guatemala; Neal Hot Springs, Oregon and adjoining the Raft River properties in Raft River, Idaho. The Company incurred total lease expenses for the three months ended March 31, 2013 and 2012, of $13,983 and $19,502 ; respectively. BLM Lease Agreements The Company believes that it is in compliance with all of the following lease terms. Idaho On August 1, 2007, the Company signed a geothermal resources lease agreement with the United States Department of the Interior Bureau of Land Management (“BLM”). The contract requires an annual payment of $3,502 including processing fees. The primary term of the agreement is 10 years. After the primary term, the Company has the right to extend the contract. BLM has the right to terminate the contract upon written notice if the Company does not comply with the terms of the agreement. San Emidio The lease contracts are for approximately 21,905 acres of land and geothermal rights located in the San Emidio Desert, Nevada. The lease contracts have primary terms of 10 years. Per federal regulations applicable for the contracts, the lessee has the option to extend the primary lease term another 40 years if the BLM does not need the land for any other purpose and the lessee is maintaining production at commercial quantities. The leases require the lessee to conduct operations in a manner that minimizes adverse impacts to the environment. Gerlach The Gerlach Geothermal LLC assets are comprised of two BLM geothermal leases and one private lease totaling 3,615 acres. Both BLM leases have a royalty rate which is based upon 10% of the value of the resource at the wellhead. The amounts are calculated according to a formula established by Minerals Management Service (“MMS”). One of the two BLM leases has a second royalty commitment to a third party of 4% of gross revenue for power generation and 5% for direct use based on BTUs consumed at a set comparable price of $7.00 per million BTU of natural gas. The private lease has a 10 year primary term and would receive a royalty of 3% gross revenue for the first 10 years and 4% thereafter. Granite Creek The Company has three geothermal lease contracts with the BLM for the Granite Creek properties. The lease contracts are for approximately 2,443.7 acres of land and geothermal water rights located in North Western Nevada. The lease contracts have primary terms of 10 years. Per federal regulations applicable for the contracts, the lessee has the option to extend the primary lease term another 40 years if the BLM does not need the land for any other purpose and the lessee is maintaining production at commercial quantities. The leases state annual lease payments of $2,444, not including processing fees, and expire October 2017. Raft River Energy I LLC The Company has entered into several lease contracts for approximately 1,298 acres of land and geothermal water rights located in the Raft River area located in Southern Idaho. The contracts expire from March 2013 to December 2033. The contracted lease payments are scheduled for $31,287 for the year ended December 31, 2013. Office Lease The Company exercised its one-year renewal option in January 2013. The lease payments are due in monthly installments of $6,535. The Company incurred total office lease expenses under the current contract and the prior contract for three months ended March 31, 2013 and 2012, totaled $19,606 and $19,035 ; respectively. The following is the total contracted lease operating obligations (operating leases, BLM lease agreements and office lease) for the next five fiscal years: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="60%"> <tr valign="top"> <td align="center">Year Ending</td> <td align="left" width="1%"> </td> <td align="left" width="20%"> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" style="BORDER-BOTTOM: #000000 1px solid">December 31,</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" width="20%">Amount</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="20%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2013</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="20%"> 150,231 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">2014</td> <td align="left" width="1%"> </td> <td align="right" width="20%"> 98,375 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2015</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="20%"> 98,462 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">2016</td> <td align="left" width="1%"> </td> <td align="right" width="20%"> 96,570 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff">2017</td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="20%"> 60,397 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center">Thereafter</td> <td align="left" width="1%"> </td> <td align="right" width="20%"> 551,424 </td> <td align="left" width="2%"> </td> </tr> </table> </div> Power Purchase Agreements Raft River Energy I LLC The Company signed a power purchase agreement with Idaho Power Company for sale of power generated from its joint venture Raft River Energy I LLC. The Company also signed a transmission agreement with Bonneville Power Administration for transmission of electricity from this plant to Idaho Power, and from the Phase Two plants to other purchasers. These agreements will govern the operational revenues for the initial phases of the Company’s operating activities. USG Nevada LLC As a part of the purchase of the assets from Empire Geothermal Power, LLC and Michael B. Stewart acquisition (“Empire Acquisition”), a power purchase agreement with Sierra Pacific Power Company was assigned to the Company. The contract had a stated expected output of 3,250 kilowatts maximum per hour and extended through 2017. During the year ended March 31, 2012, the power purchase agreement was replaced by a new 25 year contract signed in December of 2011 that sets the new set rate at $89.70 per megawatt hour with a 1% annual escalation rate. The new contract allows for a maximum of 71,300 megawatt hours annually. Upon declaration of commercial operation under the PPA, an Operating Security Deposit of $1,426,700 is required to be maintained at NV Energy for the full term of the PPA. During the year ended December 31, 2012, the Company paid a security bond of $1,426,700 under the terms of this agreement. USG Oregon LLC In December of 2009, the Company’s subsidiary (USG Oregon LLC), signed a power purchase agreement with Idaho Power Company for the sale of power generated by the Neal Hot Springs, Oregon project. The agreement has a term of 25 years and provides for the purchase of power up to 25 megawatts (22 megawatt planned annual average output level). Beginning 2012, the flat energy price is $96 per megawatt hour. The price escalates annually by 3.9% in the initial years and by 1.0% during the latter years of the agreement. The approximate 25 -year levelized price is $117.65 per megawatt hour. 401(k) Plan The Company offers a defined contribution plan qualified under section 401(k) of the Internal Revenue Code to all its eligible employees. All employees are eligible at the beginning of the quarter after completing 3 months of service. The plan requires the Company to match 25% of the employee’s contribution up to 6%. Employees may contribute up to the maximum allowed by the Internal Revenue Code. The Company made matching contributions to the plan that totaled $10,096 and $9,478 for the three months ended March 31, 2013 and 2012, respectively. Retention Liability on USG Oregon LLC Construction Contracts The Company signed contracts with several major contractors involved in construction activities for USG Oregon LLC. Contracts for two of these major contractors allow for the Company to retain a portion of incurred costs to guarantee certain performance specifications. The retention levels generally amount to 10% of incurred costs. At March 31, 2013, the retention payable balance was $5,119,939. Currently, management does not have any performance concerns on these contracts.

150231 98375 98462 96570 60397 551424 13983 19502 3502 10 21905 10 40 3615 0.10 0.04 0.05 7.00 10 0.03 10 0.04 2443.7 10 40 2444 1298 31287 6535 19606 19035 3250 25 89.70 0.01 71300 1426700 1426700 25 25 96 0.039 0.01 25 117.65 3 0.25 0.06 10096 9478 0.10 5119939 NOTE 17 – JOINT VENTURES/NON-CONTROLLING INTERESTS Non-controlling interests included on the consolidated balance sheets of the Company are detailed as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">March 31,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Gerlach Geothermal LLC interest held by Gerlach Green Energy, LLC</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 411,663 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 404,434 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Oregon USG Holdings LLC interest held by Enbridge Inc.</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 33,926,434 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 33,078,744 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Raft River Energy I LLC interest held by Raft River I Holdings, LLC</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 22,563,268 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 22,598,020 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 56,901,365 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 56,081,198 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> Gerlach Geothermal LLC On April 28, 2008, the Company formed Gerlach Geothermal, LLC (“Gerlach”) with our partner, Gerlach Green Energy, LLC (“GGE”). The purpose of the joint venture is the exploration of the Gerlach geothermal system, which is located in northwestern Nevada, near the town of Gerlach. Based upon the terms of the members’ agreement, the Company owns a 60% interest and GGE owns a 40% interest in Gerlach Geothermal, LLC. The agreement gives GGE an option to maintain its 40% ownership interest as additional capital contributions are required. If GGE dilutes to below a 10% interest, their ownership position in the joint venture would be converted to a 10% net profits interest. The Company has contributed $757,190 in cash and $300,000 for a geothermal lease and mineral rights; and the GGE has contributed $704,460 of geothermal lease, mineral rights and exploration data. The consolidated financial statements reflect 100% of the assets and liabilities of Gerlach, and report the current non-controlling interest of GGE. The full results of Gerlach’s operations are reflected in the statement of operations with the elimination of the non-controlling interest identified. Oregon USG Holdings LLC In September 2010, the Company’s subsidiary, Oregon USG Holdings LLC (“Oregon Holdings”), signed an Operating Agreement with Enbridge Inc. (“Enbridge”) for the right to participate in the Company’s project in the Neal Hot Springs project located in Malheur County, Oregon. Enbridge has contributed a total of $18,924,000, including the debt conversion, to Oregon Holdings in exchange for a 20% direct ownership interest. At the Company’s election, the agreement allows for additional contributions of up to $5 million that would increase Enbridge’s ownership by 1.5 percentage points for each $1 million contributed. Added to their base 20% ownership, additional payments could increase Enbridge’s ownership to a maximum of 27.5% under the existing agreement. The Company has contributed $13,492,000 to Oregon Holdings and has an 80% ownership interest. Oregon Holdings has a 100% ownership interest in USG Oregon LLC. After the initial contributions noted above, the Company and Enbridge have made additional capital contributions of $462,616 and $13,877,000 ; respectively. The impact of the additional contributions to the profit and loss allocation percentages could increase Enbridge’s ownership to 44%. The actual non-controlling ownership interest has not been determined, but has been estimated between 30% and 40%. For the three months ended March 31, 2013, the profit and loss allocation rate of 35% was utilized that was based upon an estimate of the expected ownership percentage after the contribution levels and other terms of the new ownership agreement are finalized. Prior to January 1, 2013, the allocation rate of 20% was used that was based upon the terms of the initial agreement. The consolidated financial statements reflect 100% of the assets and liabilities of Oregon Holdings and USG Oregon LLC, and report the current non-controlling interest of Enbridge. The full results of Oregon Holdings and USG Oregon LLC’s operations are reflected in the statement of operations with the elimination of the non-controlling interest identified. Raft River Energy I LLC (“RREI”) Raft River Energy I is a joint venture between the Company and Raft River I Holdings, LLC a subsidiary of the Goldman Sachs Group, Inc. An Operating Agreement governs the rights and responsibilities of both parties. At fiscal year end, the Company had contributed approximately $17.9 million in cash and property, and RREI has contributed approximately $34.1 million in cash. Profits and losses are allocated to the members based upon contractual terms. For income tax purposes, Raft River I Holdings, LLC receives a greater proportion of the share of losses and other income tax benefits. This includes the allocation of production tax credits, which will be distributed 99% to Raft River I Holdings, LLC and 1% to the Company during the first 10 years of production. During the initial years of operations, Raft River I Holdings, LLC will receive a larger allocation of cash distributions. The consolidated financial statements reflect 100% of the assets and liabilities of RREI, and report the current non-controlling interest of Raft River I Holdings LLC. The full results of Raft River Energy I LLC’s operations are reflected in the statement of operations with the elimination of the non-controlling interest identified. Effective May 17, 2011, a repair services agreement (“RSA”) was executed between the RREI and U.S. Geothermal Services, LLC for the purpose of funding repairs of two underperforming wells. The agreement defined terms of the RSA repair costs and RSA repair management fees that would be funded by the loan. The outstanding loan balance will accrue interest at 12.0% per annum. The RSA payments will be made preferentially from project cash flow at a rate of 90% of increased cash created by the repairs and cash availability on a quarterly basis. The repairs were completed in January 2012. Based upon the financial conditions applicable to the loan, RREI did not make any payments during the year ended December 31, 2012. As of December 31, 2012, the loan balance amounted to $2,136,150. During the quarter ended March 31, 2013, RREI made payments on the loan of $258,410. The balance of the loan at March 31, 2013 was $1,934,490. The loan balance and related interest effects are fully eliminated during the consolidation process. <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; border-collapse: collapse; font-size: 10pt; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">March 31,</td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%">December 31,</td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2013</td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%">2012</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr> <td> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Gerlach Geothermal LLC interest held by Gerlach Green Energy, LLC</td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 411,663 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="12%"> 404,434 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="left">Oregon USG Holdings LLC interest held by Enbridge Inc.</td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 33,926,434 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="12%"> 33,078,744 </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Raft River Energy I LLC interest held by Raft River I Holdings, LLC</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 22,563,268 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> 22,598,020 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 56,901,365 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">$</td> <td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%"> 56,081,198 </td> <td align="left" style="BORDER-BOTTOM: #000000 3px double" width="2%"> </td> </tr> </table> 411663 404434 33926434 33078744 22563268 22598020 56901365 56081198 0.60 0.40 0.40 0.10 0.10 757190 300000 704460 1.00 18924000 0.20 5000000 0.015 1000000 0.20 0.275 13492000 0.80 1.00 462616 13877000 0.44 0.30 0.40 0.35 0.20 1.00 17900000 34100000 0.99 0.01 10 1.00 0.12 0.90 2136150 258410 1934490

NOTE 18 - SUBSEQUENT EVENTS The Company has evaluated events and transactions that have occurred after the balance sheet date through May 13, 2013, which is considered to be the issuance date. The following events were identified for disclosure. Cash Grant Proceeds and Convertible Loan Agreement On April 3, 2013, USG Oregon LLC collected a payment of $32,749,541 from the U.S. Department of Treasury. The cash grant is for the Specified Energy Property in Lieu of Tax Credits program related to the Neal Hot Springs geothermal power plant under Section 1603, Division B of the American Recovery and Reinvestment Act of 2009. Under the terms of the convertible loan agreement with Oregon USG Holdings, LLC and Enbridge Inc. (see note 10 for details), the collection of the grant funds by the Project is one of the conversion events; therefore, the convertible loan for $2,125,000 became due in April 2013. Management is currently making arrangements with Enbridge Inc. to satisfy the obligation. Retirement and Replacement of CEO On April 22, 2013, the Company announced that the founder, director and Chief Executive Officer Daniel Kunz will retire as chief executive and a member of the Board of Directors. Dennis Gilles was named by the Board as his successor as Chief Executive Officer. Under a succession plan, Mr. Kunz will serve as a consultant providing advisory services for one year to ensure a smooth transition. El Ceibillo Project On April 30, 2013, the Company announced that its wholly owned subsidiary, U.S. Geothermal Guatemala S.A. started drilling a test/development well. The well location was selected based upon two geophysical surveys that were completed in January and February 2013.

32749541 2125000