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7. Research and development
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6 Months Ended | ||
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Jun. 30, 2011
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| Research, Development, and Computer Software, Policy [Policy Text Block] |
The
Company has research and development facilities in Morgan
Hill, California. The Company has tested products
incorporating our ZEFS, MK IV, ELEKTRA and AOT technologies
for multiple makes and models diesel engines, motorbikes,
boats, generators, lawnmowers, other small engines and
pipelines. The Company has purchased test vehicles, test
engines and testing equipment. The Company incurred
$81,213 and $29,802 and $552,568 and $204,095 for
the three and six months ended June 30, 2011 and 2010,
respectively, on its research and development
activities.
AOT
TESTING
In
mid-July, 2010, the Company entered into a Letter of Intent
with the U.S. Department of Energy-Naval Petroleum
Reserve/Rocky Mountain Oilfield Testing Center (RMOTC) in
Wyoming. On December 22, 2010, a formal Agreement
was entered into with RMOTC for testing of our Applied Oil
Technology (AOT). Third-party vendors and
suppliers were used by the Company to provide the facility
construction materials and the prototype’s design
and fabrication. To conduct the testing, the
Company was responsible for designing and building the
testing facility, located on the Naval Petroleum Reserve #3.
Design and engineering began on January 6, 2011 and
construction was completed on June 30, 2011. Costs
incurred for the testing during the six months ended June 30,
2011 was $542,540.
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