TECHNOLOGY RIGHTS AND LICENSE AND ROYALTY AGREEMENTS, PATENT COSTS, OTHER INTANGIBLE ASSETS, AND DEBT OFFERING COSTS

During 2011, there were no additions or impairments to technology rights and license and royalty agreements. During 2011, in an effort to concentrate our business focus on our core product development and marketing, we conveyed our WayCool and WayFast patent portfolio to Olantra Fund X LLC for a cash payment of $500,000. During 2010, the Company capitalized $70,000 of technology rights related to power technologies. Also during 2010, the Company recorded an impairment charge of $3,105,956 related to WayCool technology rights.

The technology rights are amortized over the twenty-year estimated life of the technology, unless a shorter life is deemed appropriate by management based on the life expectancy of the related technology. The technology rights balance at December 31, 2011 and 2010 were as follows:

	2011			2010
Technology Rights	$	303,664		$	803,664
Accumulated amortization		(51,269	)		(24,761	)
Net	$	252,395		$	778,903

Amortization of technology rights during 2011 was $245,144 compared to $262,788 in 2010. The estimated annual amortization expense related to existing technology rights as of December 31, 2011 is expected to be $26,508 in 2012, $26,508 in 2013, $26,508 in 2014 and $21,842 in 2015. Management has evaluated the technology rights for impairment and believes no additional impairment expense related to technology rights exists at December 31, 2011.

During 2011, there were $6,646 of additions to patent costs, with no impairments. During 2010, there were $7,230 of additions and $418,185 of impairments to patent costs related to WayCool patent costs. Patent costs are amortized over the life of the patent. Any patents not approved will be expensed at that time. Amortization of patent costs during 2011 was $333 compared to $17,415 during 2010. The estimated annual amortization expense related to existing patent costs as of December 31, 2011 is expected to be $665 in 2012, $665 in 2013, $665 in 2014 and $665 in 2015. Management has evaluated patent costs for impairment as of December 31, 2011 and believes no additional impairment expense related to patent costs exists at December 31, 2011.

During 2011 and 2010, there were $37,418 and $0 of additions to other intangible assets, respectively. Other intangible assets are being amortized over their useful lives. Amortization of other intangible assets during 2011 was $4,328 compared to $11,502 during 2010. The estimated annual amortization expense related to existing other intangible assets as of December 31, 2011 is expected to be $6,896 in 2012, $6,896 in 2013, $6,896 in 2014 and $6,896 in 2015. Management has reviewed other intangible assets and believes there is no impairment expense related to other intangible assets exists at December 31, 2011.

As of December 31, 2011, $220,000 of debt offering costs related to payments issued in efforts to secure debt financing for the Company have been capitalized. The debt offering costs are amortized over the life of the applicable loan. Amortization of debt offering costs during 2011 was $334,747 compared to $716,271 in 2010. The estimated annual interest expense for the amortization of debt offering costs existing at December 31, 2011 is expected to be $73,333 in 2012, $42,778 in 2013, $0 thereafter.