Note 8 – Subsequent events

On February 12, 2014, the Company announced that Steven Elliott was appointed as the Company’s President and Chief Executive Officer and entered into an employment agreement (the “Elliott Agreement”). The Elliott Agreement will initially expire on February 12, 2018. Under the terms of the Elliott Agreement, Mr. Elliott will receive an annual base salary of $240,000 subject to certain terms and conditions. In addition, Mr. Elliott will be entitled to receive on a fiscal year basis a cash bonus determined in the discretion of the Board of Directors of up to fifty (50%) percent of his annual salary. Under the terms of the Elliott Agreement, Mr. Elliott was issued stock options to purchase an aggregate of 3,000,000 shares of the Company’s common stock at an exercise price of $0.50 per share which shall vest as follows (i) 750,000 of such options shall vest upon consummation of a debt or equity financing, or combination thereof, of not less than $3,000,000, (ii) 562,500 options shall vest on the first anniversary of the date of the Elliott Agreement and (iii) the remaining 1,687,500 options shall vest monthly in equal monthly amounts of 46,875 options per month, for each of the 36 months following the first anniversary of the date of the Elliott Agreement.

On April 8, 2014, Steven Elliott resigned as President and Chief Executive Officer of the Company. Subsequently the Company appointed Joseph N. Fasciglione, the interim Chief Financial Officer, to serve as interim President and interim Chief Executive Officer.

On February 12, 2014, the Company entered into a four-year consulting service agreement (the “Consulting Agreement”) with Dr. Andrea Festuccia, PhD. (“Consultant”), pursuant to which Dr. Festuccia will serve as Chief Strategist in enhancing product value, competitiveness and performance for the Company. In consideration for the services to be provided, the Company shall pay Consultant a consulting fee of $240,000 per year payable at a rate of $20,000 per month. Dr. Festuccia is also Chairman of the Company’s Board of Directors.

Between February 14, 2014 and March 7, 2014, the Company has completed the sale of additional December 2013 Notes to two investors who became parties to the December Purchase Agreement. Such investors each invested the principal amount of $100,000. The investors also received warrants exercisable for a period of five years from issuance to purchase an aggregate of 600,000 December Warrant Shares at an initial exercise price of $1.00 per share. The warrant contains certain cashless exercise provisions and the shares of Common Stock underlying the December 2013 Notes and Warrant Shares are subject to certain registration rights