4. Litigation	9 Months Ended
Sep. 30, 2012
Litigation
NOTE 4 - Litigation	In March 2011, four of our shareholders filed an action in Superior Court of California, in Santa Barbara County (lead plaintiff is Howell Douglas Wood (“Wood”)), against us, our Chief Executive Officer at that time (“CEO”), Chief Financial Officer (“CFO”) and its outside directors. The complaint alleges violations of the California Corporations Code relating to the issuance of securities to the plaintiffs, fraud, breach of fiduciary duty, breach of contract, and breach of the covenant of good faith and fair dealing relating to the handling of requests by the plaintiffs to sell their shares. The complaint seeks unspecified compensatory and punitive damages, recovery of attorney fees and costs and certain equitable relief. In motions filed with the Court, the Company took the position that the claims were without merit, and aggressively defended the action. In October 2012, the parties reached an agreement whereby the matter has been resolved to the parties’ mutual satisfaction, and the Company anticipates that the lawsuit will be dismissed within the next 60 days of the filing of this report. In November 2011, 12 additional shareholders filed an action in Superior Court of California, in Santa Barbara County (lead plaintiff is Jeffrey Tuttle), against us, our then CEO, CFO and its outside directors. This complaint was filed by the same law firms as the Wood complaint, and is similar to the Wood complaint. As with the Wood complaint, the Tuttle complaint alleges violations of the California Corporations Code relating to the issuance of securities to the plaintiffs, fraud, breach of fiduciary duty, breach of contract, and breach of the covenant of good faith and fair dealing relating to the handling of requests by the plaintiffs to sell their shares. The complaint seeks unspecified compensatory and punitive damages, recovery of attorney fees and costs and certain equitable relief. In motions filed with the Court, the Company took the position that the claims were without merit, and aggressively defended the action. In October 2012, the parties reached an agreement whereby the matter has been resolved to the parties’ mutual satisfaction, and the Company anticipates that the lawsuit will be dismissed within the next 60 days of the filing of this report. In April 2012, Ned Sands filed a lawsuit against the Company for alleged discrimination based on religion and age in an employee termination, as well as fraud in inducing him to join the company. The plaintiff has filed his second amended complaint, which adds as additional defendants a current and former officer of the Company. The Company took the position that the claims were without merit, and aggressively defended the action. In October 2012, the parties reached an agreement whereby the matter has been resolved to the parties’ mutual satisfaction, and the Company anticipates that the lawsuit will be dismissed within the next 60 days of the filing of this report.

4. Litigation

9 Months Ended

Sep. 30, 2012

In March 2011, four of our shareholders filed an action in Superior Court of California, in Santa Barbara County (lead plaintiff is Howell Douglas Wood (“Wood”)), against us, our Chief Executive Officer at that time (“CEO”), Chief Financial Officer (“CFO”) and its outside directors. The complaint alleges violations of the California Corporations Code relating to the issuance of securities to the plaintiffs, fraud, breach of fiduciary duty, breach of contract, and breach of the covenant of good faith and fair dealing relating to the handling of requests by the plaintiffs to sell their shares. The complaint seeks unspecified compensatory and punitive damages, recovery of attorney fees and costs and certain equitable relief. In motions filed with the Court, the Company took the position that the claims were without merit, and aggressively defended the action. In October 2012, the parties reached an agreement whereby the matter has been resolved to the parties’ mutual satisfaction, and the Company anticipates that the lawsuit will be dismissed within the next 60 days of the filing of this report.

In November 2011, 12 additional shareholders filed an action in Superior Court of California, in Santa Barbara County (lead plaintiff is Jeffrey Tuttle), against us, our then CEO, CFO and its outside directors. This complaint was filed by the same law firms as the Wood complaint, and is similar to the Wood complaint. As with the Wood complaint, the Tuttle complaint alleges violations of the California Corporations Code relating to the issuance of securities to the plaintiffs, fraud, breach of fiduciary duty, breach of contract, and breach of the covenant of good faith and fair dealing relating to the handling of requests by the plaintiffs to sell their shares. The complaint seeks unspecified compensatory and punitive damages, recovery of attorney fees and costs and certain equitable relief. In motions filed with the Court, the Company took the position that the claims were without merit, and aggressively defended the action. In October 2012, the parties reached an agreement whereby the matter has been resolved to the parties’ mutual satisfaction, and the Company anticipates that the lawsuit will be dismissed within the next 60 days of the filing of this report.

In April 2012, Ned Sands filed a lawsuit against the Company for alleged discrimination based on religion and age in an employee termination, as well as fraud in inducing him to join the company. The plaintiff has filed his second amended complaint, which adds as additional defendants a current and former officer of the Company. The Company took the position that the claims were without merit, and aggressively defended the action. In October 2012, the parties reached an agreement whereby the matter has been resolved to the parties’ mutual satisfaction, and the Company anticipates that the lawsuit will be dismissed within the next 60 days of the filing of this report.