$PEFF The Company has three U.S. patents issued with

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$PEFF The Company has three U.S. patents issued with respect to its products. The first, “Balanced and Synchronized Phase Detector for an AC Induction Motor Controller,” No. 5,821,726, was issued on October 13, 1998 and expires in 2017. This patent covers improvements to the technology under the NASA License Agreement (described below), which were developed by the Company. Management believes this patent protects the Company’s intellectual property position beyond the expiration of the NASA License Agreement. The second patent, “Method, System, and Apparatus for Controlling an Electric Motor,” No. 7,768,221 B2, was issued on August 3, 2010 and expires in 2027. This patent covers the Company’s core algorithm for controlling the energy use of a three phase motor. This patent has been filed in many major world economies. The third patent, “Open Loop Method for Controlling Power,” No. 7,911,173 B2 was issued on March 22, 2011 and expires in 2030. This patent covers some the Company’s technologies used in controlling the energy use of a three phase motor. This patent has also been filed in many major world economies.

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