In May and June 2008, we granted 821,036 shares of common stock for management services and legal services with a grant-date fair value of $1,726,160 and $200,000, respectively. The shares granted for legal services vested immediately and were expensed. The shares granted for management services vest over a period of twenty months. Related to these grants we expensed $27,950 for the year ended March 31, 2011 and $20,962 for the year ended March 31, 2012.

On May 7, 2008, the Company issued 20,000 stock options for legal services. The options have an exercise price of $2.00 per share. The options vested on the grant date and the grant-date fair value of these options was $2,957, which was expensed immediately. The Company used the Black-Scholes option pricing model to value the warrants using the following assumptions: number of options as set forth in the option agreements; no expected dividend yield; expected volatility of 44%; risk-free interest rates of 2.44%; and expected term consistent with the contractual term of the warrants.

In January 2009, we granted 2,283,278 shares of common stock to certain managers as compensation. These shares were valued at $0.29 per share as of the January 2009 grant date and vest according to the following schedule: (i) 33.3% on January 1, 2010; and (ii) 8.3375% on the last calendar day of each subsequent calendar quarter, until all such shares have vested, provided; however, that such shares shall vest according to such schedule only if the officers are employed by us on such dates. Related to these grants we expensed $219,956 for the year ended March 31, 2011, and $164,967 for the year ended March 31, 2012.

In January 2009, we issued 150,000 shares of common stock to the Company’s Chief Financial Officer as compensation. The shares were valued at $0.29 per share as of the grant date and vest according to the following schedule: (i) 33.3% on January 1, 2010; and (ii) 8.3375% on the last calendar day of each subsequent calendar quarter, until all such shares have vested, provided; however, that such shares shall vest according to such schedule only if the Chief Financial Officer is employed by us on such dates. For the year ended March 31, 2011 we expensed $14,450 related to these grants, and for the year ended March 31, 2012 we expensed $10,837 related to these grants.

In March 2009, we issued 3,000,000 shares of common stock to certain managers of the Company as compensation. The shares were valued at $0.11 per share as of the grant date and vest according to the following schedule: (i) 33.3% on January 1, 2010; and (ii) 8.3375% on the last calendar day of each subsequent calendar quarter, until all such shares have vested, provided; however, that such shares shall vest according to such schedule only if the officers are employed by us on such dates. For the year ended March 31, 2011 we expensed $115,412 related to these grants and for the year ended March 31, 2012 we expensed $86,559 related to these grants.

On December 8, 2009 the Board of Directors of the Company amended all of the restricted share grants to management (discussed above) to change the vesting to January 1, 2012. These fees were included in the deferred financing costs in our consolidated balance sheet and were being amortized over the original term of the convertible notes using the effective interest rate method. During the twelve-month period ended March 31, 2012 and the twelve-month period ended March 31, 2011, we amortized $49,878 and $180,150, respectively, of deferred financing cost. During the three-month period ended March 31, 2012, due to the extinguishment of the debt in June 2011, we did not amortize any expenses. During the three-month period ended March 31, 2011 we expensed $45,038.

On April 1, 2009, we granted 2,823,528 shares of stock options with a grant-date fair value of $435,274 to four directors. These options vested immediately and were expensed. The exercise price for the stock options was based on the Company’s closing stock price on the date of grant which was $0.17. For the year ended March 31, 2010 we expensed $435,274 related to these options.

Pertaining to the April 2009 stock option grants to directors, in September 2010 the Board of Directors of the Company passed a resolution to amend, modify and extend the exercise time period for vested outstanding options as per Section 6.6 (a) of the 2008 Incentive Plan and Section 9 (b) of each director’s Option Grant document to be exercisable until January 1, 2012. This amendment and modification triggered the Company to recalculate the stock options’ valuation using a Black-Scholes option valuation model. The result was the Company recorded an expense of $202,230 due to this amendment and modification.

On December 8, 2009, the Board of Directors authorized a Director $40,000 in restricted shares, pursuant to the Company’s 2008 Incentive Plan: 60,000 shares were granted as of December 8, 2009 with a share price of $0.32 per share; which vested immediately. The remaining 61,176 shares were granted and issued on January 4, 2010 with a share price of $0.34 per share, and vested immediately upon such grant. These shares were fully expensed during the year ended March 31, 2010; therefore, we did not record any expense during the years ending March 31, 2011 or 2012.

On December 1, 2009 the Board of Directors granted related parties, Isaac Suder, No Logo Air, Inc. and Ter Mast Beheer Utrecht, B.V, restricted shares of the Company’s common stock, 125,000 shares, 93,750 shares and 156,250 shares, respectively; pursuant to loan agreements between the parties and the Company in January 2009. These shares vested immediately and were expensed by the Company at $0.32 per share. These shares were fully expensed during the year ended March 31, 2010; therefore, we did not record any expense during the years ending March 31, 2011 or 2012.

On December 31, 2009, in connection with a private offering of $3,001,033 of convertible debt we issued 700,000 shares of restricted common stock valued at $203,000. These fees were included in the deferred financing costs in our consolidated balance sheet and were being amortized over the original term of the convertible notes using the effective interest rate method. During the twelve-month period ended March 31, 2012 and the twelve-month period ended March 31, 2011, we amortized $73,314 and $249,000, respectively, of deferred financing cost. During the three-month period ended March 31, 2012, due to the extinguishment of the debt in June 2011, we did not amortize any expenses. During the three-month period ended March 31, 2011 we expensed $62,198.

On March 31, 2010, in connection with a private offering of $1,750,000 of convertible debt we issued 659,000 shares of restricted common stock valued at $171,340. These fees are included in the deferred financing costs in the consolidated balance sheet as of March 31, 2010 and will be amortized over the term of the convertible notes using the effective interest rate method. During the twelve-month period ended March 31, 2012 and the twelve-month period ended March 31, 2011, we amortized $49,878 and $180,150, respectively, of deferred financing cost. During the three-month period ended March 31, 2012, due to the extinguishment of the debt in June 2011, we did not amortize any expenses. During the three-month period ended March 31, 2011 we expensed $45,038.

On April 29, 2009, the Company entered into a one year supplemental retainer agreement with Milling Benson Woodward, L.L.P. (“Milling”) wherein, as of April 1, 2009, Milling agreed to accept 50% of its monthly retainer fee payable in the common stock of the Company, with the remainder, payable in cash. Through March 31, 2010, Milling had received 500,004 shares of common stock. These shares were fully expensed during the year ended March 31, 2010; therefore, we did not record any expense during the years ending March 31, 2011 or 2012.

On June 30, 2009 we granted a former employee 60,530 shares of common stock as compensation. The shares vested immediately and have a grant-date fair value of $10,290, which was expensed on the date of grant. These shares were fully expensed during the year ended March 31, 2010; therefore, we did not record any expense during the years ending March 31, 2011 or 2012.

In September 2010, we issued 304,255 shares of common stock to certain managers and directors of the Company as compensation. The shares were valued at $0.30 per share as of the grant date and vested immediately for the directors; and for the managers, the vesting date was set to be January 1, 2012. For the year ended March 31, 2011 we expensed 100% of these grants for directors, $39,119. For the year ended March 31, 2011 we expensed $21,602 related to these grants for managers and for the year ended March 31, 2012 we expensed $29,339 related to these grants for managers.

In November 2010, we issued 54,125 shares of common stock to certain managers of the Company as compensation. The shares were valued at $0.63 per share as of the grant date and the vesting date was set to be January 1, 2012. For the year ended March 31, 2011 we expensed $12,415 related to these grants, and for the year ended March 31, 2012 we expensed $22,902 related to these grants.

On May 19, 2010, the Company entered into an investor relations agreement with Malcolm McGuire & Associates, L.L.C. (“McGuire) and amended the agreement on June 11, 2010. These agreements require the Company to grant McGuire the option to purchase 100,000 shares of restricted common stock at an exercise price of $0.50 per share. The options vested on November 20, 2010 and may be exercised by McGuire at any time after vesting date and prior to November 20, 2015. Related to these options the Company recorded an expense of $60,854. The agreement with McGuire also requires the Company, beginning in June 2010 and every month for a six month period, to issue 2,500 shares of the Company’s restricted common stock. The initial six-month time period was allowed to extend. The Company terminated the agreement with McGuire, effective February 29, 2012.

For the period May 2010 through March 31, 2011, McGuire received 25,000 shares of the Company’s restricted common stock, and the Company recorded an expense in the amount of $11,575. For the period April 2011 through February 29, 2012 (the date the contract was terminated), McGuire received 27,500 shares of the Company’s restricted common stock, and the Company recorded an expense in the amount of $12,463.

On May 10, 2011, former director Christopher Wilson gave notice to the Company of his intent to exercise the 705,882 options granted to him in 2009, in a cashless exercise transaction. This cashless option exercise transaction resulted in Mr. Wilson surrendering 196,722 shares; determined by the stated exercise amount of $120,000 (exercise per share price of $0.17 for the 705,882 options granted to him in 2009), divided by the value of the Company’s common stock share price on May 10, 2011 of $0.61, the date of exercise. After surrendering the 196,722 shares, Mr. Wilson received 509,160 common shares. The Company did not record any expenses related to this event.

On June 6, 2011, we issued 298,000 shares of common stock to certain managers of the Company as compensation. The shares were valued at $0.60 per share as of the grant date and the vesting date was set to be January 1, 2015. For the year ended March 31, 2012 we expensed $40,940 related to these grants.

On October 05, 2011, director Herbert Whitney gave notice to the Company of his intent to exercise 200,000 of the options granted to him in 2009, in a cashless exercise transaction. This cashless option exercise transaction resulted in Mr. Whitney surrendering 75,555 shares; determined by the stated exercise amount of $34,000 (exercise per share price of $0.17 for 200,000 of the options granted to him in 2009), divided by the value of the Company’s common stock share price on October 05, 2011 of $0.45, the date of exercise. After surrendering the 75,555 shares, Mr. Whitney received 124,445 common shares. The Company did not record any expenses related to this event.

On November 17, 2011, director Herbert Whitney gave notice to the Company of his intent to exercise 200,000 of the options granted to him in 2009, in a cashless exercise transaction. This cashless option exercise transaction resulted in Mr. Whitney surrendering 77,273 shares; determined by the stated exercise amount of $34,000 (exercise per share price of $0.17 for 200,000 of the options granted to him in 2009), divided by the value of the Company’s common stock share price on November 17, 2011 of $0.44, the date of exercise. After surrendering the 77,273 shares, Mr. Whitney received 122,727 common shares. The Company did not record any expenses related to this event.

On December 21, 2011, former director Mathijs von Houweninge gave notice to the Company of his intent to exercise 705,882 of the options granted to him in 2009, in a cashless exercise transaction. This cashless option exercise transaction resulted in Mr. Houweninge surrendering 285,714 shares; determined by the stated exercise amount of $120,000 (exercise per share price of $0.17 for the 705,882 options granted to him in 2009), divided by the value of the Company’s common stock share price on December 21, 2011 of $0.42, the date of exercise. After surrendering the 285,714 shares, Mr. Houweninge received 420,168 common shares. The Company did not record any expenses related to this event.

On December 22, 2011, director Herbert Whitney gave notice to the Company of his intent to exercise 305,882 of the options granted to him in 2009, in a cashless exercise transaction. This cashless option exercise transaction resulted in Mr. Whitney surrendering 123,810 shares; determined by the stated exercise amount of $52,000 (exercise per share price of $0.17 for 305,882 of the options granted to him in 2009), divided by the value of the Company’s common stock share price on December 22, 2011 of $0.42, the date of exercise. After surrendering the 123,810 shares, Mr. Whitney received 182,072 common shares. The Company did not record any expenses related to this event.

On December 1, 2011 the Board of Directors of the Company amended all of the restricted share grants to management having a revised vesting date of January 1, 2012 (discussed above) to a vesting of January 1, 2015. The fair value of the affected options immediately after the amendment was compared to the fair value immediately prior to the amendment, and the incremental increase in fair value is being recognized over the remaining service period, which is equal to the vesting period.

As of March 31, 2012, there was approximately $137,859 of total unrecognized compensation cost related to restricted share-based compensation arrangements granted under the 2008 Plan. That cost is expected to be recognized over the next 33 months. As of March 31, 2012, outstanding options had an aggregate intrinsic value of $257,118.