Dr. Phil, you might want to check on the Quanstar connection one more time.
On May 30, 2006, the Company issued 250,000 shares of restricted common stock to
Visionary Innovations, Inc., in exchange for services, pursuant to a letter
agreement dated January 31, 2006. For accounting purposes, the services were
valued at $150,000. Visionary Innovations, Inc., and its principal, Scott
Shaffer, agreed to provide strategic and consulting services to the Company in
connection with the worldwide commercialization of the Company's proprietary
ElectriPlast technology for a period of one year, in exchange for the shares and
a contingent fee equal to 2% of the Net Revenue actually paid to the Company by
new clients or other parties directly introduced by Visionary ("Net Revenue" is
defined to mean revenue actually received by the Company from third parties in
respect of sales of the Company's products and/or services, license fees, or
research grants, net of taxes payable by the Company with respect to such
amounts and all direct costs incurred by the Company in generating such
revenue). The Company believes this transaction was exempt from registration
under Section 4(2) and Section 4(6) of the Securities Act of 1933 and/or Rule
506 of Regulation D. The transaction did not involve a public offering, no sales
commissions were paid, and a restrictive legend was placed on the certificate
evidencing the shares.