On July 1, 2013, the Company converted $166,190 of accrued interest on convertible notes payable to principal due on the notes.

On July 12, 2013, the Company, upon conversion of a promissory note dated June 27, 2013, issued 506,920 shares of common stock and 126,730 warrants to purchase common shares to Richard MacPherson, a member of the Company’s Board of Directors, pursuant to a notice of conversion received by the Company from Mr. MacPherson to convert a promissory note held by Mr. MacPherson with a principal balance of $252,199 and accrued interest of $1,261 into 506,920 units of the Company, with each unit consisting of one share of common stock of the Company and one warrant to purchase 0.25 additional shares of common stock at $0.75 per share.

On July 12, 2013, the Company, upon conversion of a promissory note dated June 27, 2013, issued 1,234,164 shares of common stock and 308,541 warrants to purchase common shares to Nova Scotia Company, pursuant to a notice of conversion received from Nova Scotia Company to convert a promissory note held by Nova Scotia Company with a principal balance of $614,012 and accrued interest of $3,070 into 1,234,164 units of the Company, with each unit consisting of one share of common stock of the Company and one warrant to purchase 0.25 additional shares of common stock at $0.75 per share.

On July 30, 2013, the Company sold convertible notes and warrants to unaffiliated accredited investors totaling $447,500. The notes are convertible into one share of common stock, par value $0.001 per share, with the initial conversion ratio equal to $0.50 per share. For each dollar invested, the investor received two warrants to purchase one share of common stock of the Company at an exercise price of $0.75 per share. The notes may be converted at any time and from time to time in whole or in part prior to the maturity date thereof. In conjunction with the sale of these notes and warrants, the Company issued ViewTrade Securities, Inc. 134,250 warrants to purchase one share of common stock of the Company at an exercise price of $0.50 per share and 134,250 warrants to purchase one share of common stock of the Company at an exercise price of $0.75 per share. These securities were sold in reliance upon the exemption provided by Section 4(2) of the Securities Act and the safe harbor of Rule 506 under Regulation D promulgated under the Securities Act.

On August 8, 2013, the Company paid the $75,488 to the Bank of North Dakota New Venture Capital Program to payoff the promissory note dated September 13, 2011 and accrued interest through the payoff date.

On August 8, 2013, the Company paid the $75,488 to the Bank of North Dakota Development Fund, Inc. to payoff the promissory note dated September 13, 2011 and accrued interest through the payoff date.