<SEC-DOCUMENT>0000721748-16-000944.txt : 20160122
<SEC-HEADER>0000721748-16-000944.hdr.sgml : 20160122
<ACCEPTANCE-DATETIME>20160122163119
ACCESSION NUMBER:		0000721748-16-000944
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20160122
DATE AS OF CHANGE:		20160122

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Safety Quick Lighting & Fans Corp.
		CENTRAL INDEX KEY:			0001598981
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC LIGHTING & WIRING EQUIPMENT [3640]
		IRS NUMBER:				463645414
		STATE OF INCORPORATION:			FL
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-208959
		FILM NUMBER:		161356534

	BUSINESS ADDRESS:	
		STREET 1:		4400 NORTH POINT PARKWAY
		STREET 2:		SUITE 154
		CITY:			ALPHARETTA
		STATE:			GA
		ZIP:			30022
		BUSINESS PHONE:		770-754-4711

	MAIL ADDRESS:	
		STREET 1:		4400 NORTH POINT PARKWAY
		STREET 2:		SUITE 154
		CITY:			ALPHARETTA
		STATE:			GA
		ZIP:			30022
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>sfql424b3012016.htm
<TEXT>
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<P STYLE="margin: 0; text-align: right">Filed Pursuant to Rule 424(b)(3)</P>

<P STYLE="margin: 0; text-align: right">Registration No. 333-208959</P>

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<P STYLE="margin: 0; text-align: left; font-weight: bold"></P>

<P STYLE="margin: 0; text-align: center">&nbsp;</P>

<P STYLE="margin: 0; text-align: center">&nbsp;</P>

<P STYLE="margin: 0; text-align: center"><B>PROSPECTUS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>SAFETY QUICK LIGHTING &amp; FANS CORP.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><IMG SRC="image_001.jpg" ALT="" STYLE="height: 125; width: 287"></P>

<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>4,282,666 Shares of Common Stock</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">This prospectus relates to the resale of up
to 4,282,666 shares of our common stock (this &ldquo;Offering&rdquo;). We are not selling any shares of our common stock in this
offering and will not receive any proceeds from this offering.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The selling security holders named in this
prospectus are offering to sell shares of our common stock through this prospectus and they may be deemed &ldquo;underwriters&rdquo;
as that term is defined in Section 2(a)(11) of the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The selling security holders named in this
prospectus may, from time to time, offer the shares covered in negotiated transactions or otherwise at a fixed price of $1.00
per share and thereafter at market prices prevailing at the time of sale or at privately negotiated prices. The selling security
holders will pay all brokerage commissions and discounts attributable to the sale of the shares plus brokerage fees. The selling
security holders will receive all of the net proceeds from this offering. We bear all costs associated with the registration of
the shares covered by this prospectus; provided, however, we will not be required to pay any underwriters&rsquo; discounts or
commissions relating to the securities covered by this prospectus.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Shares of the Company&rsquo;s common stock
are quoted on the OTCQB&reg; Venture Market under the symbol &ldquo;SQFL&rdquo;. To the Company's knowledge, only a small percentage
of our total issued and outstanding shares of common stock have been deposited with broker/dealers as of the date of this prospectus,
and no shares of our common stock have yet been offered for sale. Therefore, while our shares of common stock are eligible for
trading, a liquid public market has not yet developed. We cannot predict the future prices at which our shares will trade, or
the liquidity of a public market for our shares of common stock, should one develop.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We qualify as an &ldquo;emerging growth company&rdquo;
as defined in the Jumpstart our Business Startups Act (&ldquo;JOBS Act&rdquo;). For more information, see the section titled &ldquo;Emerging
Growth Company Status&rdquo; starting on page 3 of this prospectus.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>The Company is currently in the
development stage and has minimal operations and revenues to date and there can be no assurance that the Company will be successful
in furthering its operations and/or revenues. Persons should not invest unless they can afford to lose their entire investment.
</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Investing in our securities involves a
high degree of risk. You should purchase these units only if you can afford a complete loss of your investment. See &ldquo;Risk
Factors&rdquo; beginning on page 7 of this prospectus. &nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Neither the SEC nor any state securities commission has approved
or disapproved of these securities or determined whether this prospectus is truthful or complete.&nbsp;&nbsp;Any representation
to the contrary is a criminal offense.</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>The date of this prospectus is January 22,
2016</B></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="TableOfContents" TITLE="Table of Contents"></A>&nbsp;<B>TABLE OF CONTENTS</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;&nbsp;</B></P>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%">
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 90%; text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">PROSPECTUS SUMMARY</TD>
    <TD STYLE="width: 10%; text-align: right; padding-top: 0in; padding-bottom: 5pt">1</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">THE OFFERING</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">4</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">SUMMARY FINANCIAL DATA</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">6</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">RISK FACTORS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">7</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">CAUTIONARY NOTE REGARDING FORWARD-LOOKING
    STATEMENTS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">17</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">TAX CONSIDERATIONS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">17</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">USE OF PROCEEDS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">17</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">CAPITALIZATION</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">18</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">DETERMINATION OF THE OFFERING PRICE</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">18</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">MARKET FOR COMMON STOCK</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">18</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">DIVIDEND POLICY</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">18</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">THE STOCK OFFERINGS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">19</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">SELLING SECURITY HOLDERS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">20</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS
    OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">23</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">BUSINESS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">37</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">PROPERTIES</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">42</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">LITIGATION</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">42</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">MANAGEMENT</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">42</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">EXECUTIVE COMPENSATION</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">45</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">PRINCIPAL SHAREHOLDERS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">51</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">RELATED PARTY TRANSACTIONS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">55</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">DESCRIPTION OF SECURITIES</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">55</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">PLAN OF DISTRIBUTION</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">56</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">LEGAL MATTERS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">58</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">EXPERTS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">58</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">ADDITIONAL INFORMATION</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">58</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 5pt; padding-left: 0in">FINANCIAL STATEMENTS</TD>
    <TD STYLE="text-align: right; padding-top: 0in; padding-bottom: 5pt">F-1</TD></TR>
</TABLE>
<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>You should rely only on information contained
in this prospectus.&nbsp;&nbsp;We have not authorized anyone to provide you with information that is different from that contained
in this prospectus.&nbsp;&nbsp;No selling security holder is offering to sell, or seeking offers to buy, shares of common stock
in jurisdictions where such offers and sales are not permitted.&nbsp;&nbsp;The information contained in this prospectus is accurate
only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.&nbsp;&nbsp;We
are responsible for updating this prospectus to ensure that all material information is included and will update this prospectus
to the extent required by law.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>&nbsp;PROSPECTUS SUMMARY</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><I>This summary highlights certain information
appearing elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider
prior to investing in the securities offered hereby. After you read this summary, you should read and consider carefully the more
detailed information and financial statements and related notes that we include in this prospectus, especially the sections entitled
&ldquo;Risk Factors&rdquo; and &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations.&rdquo;
If you invest in our securities, you are assuming a high degree of risk.</I></P>

<P STYLE="margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="margin: 0; text-align: justify"><I>Unless we have indicated otherwise or the context otherwise
requires, references in this prospectus to the &ldquo;Company,&rdquo; &ldquo;we,&rdquo; &ldquo;us&rdquo; and &ldquo;our&rdquo;
or similar terms are to Safety Quick Lighting &amp; Fans Corp.</I>&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Our Company</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Safety Quick Light LLC was  formed in
the State of Florida on May 14, 2004. On November 6, 2012, the Company&rsquo;s board of directors converted Safety Quick Light
LLC under the laws of the State of Florida into Safety Quick Lighting &amp; Fans Corp.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We are a company engaged in the business of
developing proprietary technology that enables a quick and safe installation by the use of a power plug for electrical fixtures,
such as light fixtures and ceiling fans, into ceiling and wall electrical junction boxes. As of January 8, 2016, we have three
issued U.S. patents relating to our SQL Technology (as defined below). We also have patents in China (two issued patents) and
India (one issued patent and one pending patent application), which protect different aspects of the same SQL Technology as the
three issued U.S. patents.<SUP></SUP> The Company sought intellectual property protection of its SQL Technology in China due
to its current manufacturing operations and prospective sales in China&rsquo;s market, and sought protection in India in anticipation
of future growth into India&rsquo;s developing market, both with respect to the sales of SQL Technology and potential operations
of the Company.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The intellectual property represented by these patents is a fixable socket and a
revolving plug for conducting electric power and supporting an electrical appliance attached to a wall or ceiling. The socket
is comprised of a non-conductive body that houses conductive rings connectable to an electric power supply through terminals
in its side exterior. The plug, also comprised of a non-conductive body that houses corresponding conductive rings, attaches
to the socket via a male post and is capable of feeding electric power to an appliance. The plug also includes a second
structural element allowing it to revolve with a releasable latching which, when engaged, provides a retention force between
the socket and the plug to prevent disengagement. The socket and plug can be detached by releasing the latch, disengaging the
electric power from the plug. The socket is designed to replace the support bar incorporated in electric junction boxes,
and the plug can be installed in light fixtures, ceiling fans and wall sconce fixtures. The combined socket and plug
technology will be referred to as &ldquo;the SQL Technology&rdquo; henceforth.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Our independent registered public accounting
firm has issued an audit opinion which includes an explanatory paragraph expressing doubt as to our ability to continue as a going
concern. This means there is substantial doubt that we can continue as an on-going business unless we can support our working
capital and ongoing operational cost requirements through increased revenue or additional capital raising efforts. Management&rsquo;s
plans regarding those matters are further described below in the subsection titled &ldquo;Our History and New Business Model.&rdquo;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B>Our History and New Business Model</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Safety Quick Light LLC began marketing the SQL Technology in 2007 for installation of
light fixtures and ceiling fans during manufacturing and as a kit for installing the SQL Technology in existing light fixtures
and ceiling fans. The Company sold 800,000 units of the SQL Technology OEM (&ldquo;Original Equipment Manufacturer&rdquo;) to
lighting manufacturers and retailers who installed the socket and plug technology into their lighting fixtures for sale at retail
stores. The Company also sold, directly to the retailers, 100,000 ceiling fans with the SQL Technology embedded into the product.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Our management team determined that it could improve its gross margins if it were
to market light fixtures and ceiling fans  with and without the SQL Technology already installed on fixtures (the &ldquo;New
Business Model&rdquo;), instead of marketing the SQL Technology as an add-on device. During the first quarter of 2010, the
Company&rsquo;s management took the first of several steps toward implementing its New Business Model, and discontinued
marketing the SQL Technology as an add-on device; however, existing orders were honored through 2010 and 2011, resulting in
revenues through 2012.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Company management then took the next step in furtherance of its New Business Model
and sought the endorsement of the SQL Technology from General Electric Corporation (&ldquo;GE&rdquo;). In June 2011, GE and SQL
Lighting &amp; Fans, LLC, a subsidiary of the Company, entered into a trademark licensing agreement (the &ldquo;License Agreement&rdquo;)
under which SQL Lighting &amp; Fans, LLC was licensed to use the GE monogram logo on its devices and certain other trademarks
on its ceiling fans and light fixtures through November 30, 2018, as amended. The License Agreement requires the Company to pay
a percent of revenue generated on our products using the GE monogram logo as a license fee, including a minimum license fee payment
during the term. The License Agreement enables the Company to market ceiling fans and light fixtures with and without the SQL
Technology using the GE logo. The License Agreement imposes certain manufacturing and quality control conditions that we must
maintain. In addition to marketing ceiling fans and light fixtures under the GE logo and trademarks, the Company has the right
to offer private label ceiling fans and light fixtures with the SQL Technology installed to retailers that market private label
products. We amended the License Agreement in April 2013, and again in August 2014, to allow us more flexibility and to recognize
the delay in approval of our manufacturing facilities. In return for these amendments, the Company agreed to pay a minimum total
of $12,000,000 in licensing fees, which will be due in December 2018.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In furtherance of its New Business Model, the Company sought to establish trade
distribution channels with key retailers. In July 2012, the Company entered into a sales and marketing agreement with Design
Solutions International, Inc. (&ldquo;DSI&rdquo;), a privately held, lighting industry design and marketing firm.
&nbsp;During the second half of 2015, DSI was acquired by NBG Home, a leading global designer, manufacturer and marketer of
home d&eacute;cor products&nbsp;owned by Kohlberg &amp; Company. The sales and marketing agreement remains in effect. In
addition to DSI&rsquo;s sales and marketing support, the Company&rsquo;s products will also be sold through GE&rsquo;s
lighting sales group as a condition of the License Agreement.</P>



<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company obtained capital resources necessary
to implement its New Business Model pursuant to an offering (the &ldquo;Notes Offering&rdquo;) of our Secured Convertible Promissory
Notes, convertible into shares of our common stock at $0.25 per share (each a &ldquo;Note&rdquo; and collectively, the &ldquo;Notes&rdquo;),
and five (5) year common stock warrants to purchase our common stock at $0.375 per share (each a &ldquo;Warrant&rdquo; and collectively,
the &ldquo;Warrants&rdquo;). On November 26, 2013, May 8, 2014 and June 25, 2014 we concluded closings of the Notes Offering with
certain &ldquo;accredited investors&rdquo;, as defined under Regulation D, Rule 501 of the Securities Act.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In June, August, November and December 2015,
the Company obtained additional capital resources necessary to implement its New Business Model through the Stock Offerings. See
&ldquo;The Stock Offerings&rdquo; beginning on page 19 of this prospectus.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company&rsquo;s New Business Model entails
the use of third party manufactures to produce the SQL Technology and the ceiling fans and light fixtures in which SQL Technology
is imbedded. The manufacturers currently used by the Company are located in the Guangdong province of China and, as required by
the Licensing Agreement with GE, must be approved by GE to ensure quality standards are met. To further ensure that quality specifications
are maintained, the Company maintains an office in the Guangdong province staffed with GE trained auditors who will regularly
inspect its products produced by the third party manufacturers.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">Through 2014, we worked on the final steps to implement our New Business Model. The
Company has obtained the necessary qualification and approval of the third party manufacturer&rsquo;s facilities. The Company
and DSI have also been actively presenting the Company&rsquo;s product lines to key retailers. The Company continues to develop
renderings and samples of new ceiling fan and light fixture designs with the SQL Technology embedded in the product for sale to
retailers. The new items are being presented to the retailers as GE-branded fans and lighting, and the retailers are currently
reviewing these new fan designs for inclusion into their upcoming programs. The Company is actively marketing and selling the
SQL Technology via its New Business Model.&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">After our year ended December 31, 2014, we
shipped our first products and recorded our first sales under the New Business Model. The sales were to a large retail operation
and consisted of ceiling fans with the GE brand. These fans did not contain the SQL Technology, however it represented a significant
milestone in the development of customer relationships with large retailers.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In February 2015, we received an updated Underwriters
Laboratories (UL) Listing for the SQL Technology. This listing will expand the type of products that we will be able to use with
the SQL Technology. This listing expanded the voltage and amperage that our product is rated for and will allow for additional
fixtures, such as heating elements to be incorporated into our ceiling fans.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company is registering up to 4,282,666 shares of its common stock, which may be
offered and sold by certain selling security holders. Purchasers who purchase shares from the selling security holders who
are not officers and directors of the company will likewise receive the selling security holder prospectus.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">On September 15, 2015, the Financial Industry Regulatory Authority (&ldquo;FINRA&rdquo;) cleared
a request to establish a market in shares of our common stock. On October 8, 2015, OTC Markets Group announced that the
Company was verified for trading on the OTCQB&reg; Venture Market, and shares of our common stock are currently quoted under
the symbol &ldquo;SQFL&rdquo;. Presently, shares of our common stock not subject to restriction are eligible for trading in
the OTCQB&reg; Venture Market. However, to the Company's knowledge, only a small percentage of our total issued
and outstanding shares of common stock have been deposited with broker/dealers as of the date of this prospectus, and no
shares of our common stock have yet been offered for sale. Therefore, while our shares of common stock are eligible for
trading, a liquid public market has not yet developed.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Corporate Information</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We are a Florida corporation.&nbsp;&nbsp;Our
principal executive offices are located at North Point Parkway, Suite 154, Alpharetta, Georgia, 30022.&nbsp;&nbsp;Our phone number
is (770) 754-4711, and our website can be found at www.safetyquicklight.com.&nbsp;&nbsp;The information on our website does not
form a part of this prospectus.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Emerging Growth Company</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We are an &ldquo;emerging growth company,&rdquo;
as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable
to other public companies.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Section 107(b) of the JOBS Act provides that an &ldquo;emerging growth
company&rdquo; can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for
complying with new or revised accounting standards. In other words, an &ldquo;emerging growth company&rdquo; can delay the
adoption of certain accounting standards until those standards would otherwise apply to private companies. We have
irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to
Section 107(b) of the JOBS Act.</P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>THE OFFERING</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 35%; text-align: left; vertical-align: top">Securities offered</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 63%; text-align: justify">Up to 4,282,666 shares of our common stock by the selling security holders.</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top">Terms of offering</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin: 0">The selling security holders will determine when and how they will sell the common stock of the Company offered
in this prospectus.</P>


</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; text-indent: 0; padding-left: 0; vertical-align: top"><P STYLE="margin: 0">Common stock issued and outstanding as of this prospectus</P>


</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"> 42,001,251 shares.</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt; text-align: left; vertical-align: top">Use of proceeds</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">We will not receive any proceeds from this offering.</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top">Dividend policy</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top">Risk factors</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0.8pt 0 0; text-align: justify">See
&ldquo;Risk Factors&rdquo; beginning on page<B> </B>7<B> </B>and the other information set forth in this prospectus for a discussion
of factors you should consider before deciding to invest in our securities.</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top">Market for common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">Shares of the Company&rsquo;s common stock are quoted on the OTCQB&reg; Venture Market under the symbol &ldquo;SQFL&rdquo;.&nbsp;&nbsp;To the Company's knowledge, only a small percentage of our total issued and outstanding shares of common stock have been deposited with broker/dealers as of the date of this prospectus, and no shares of our common stock have yet been offered for sale.&nbsp;&nbsp;Therefore, while our shares of common stock are eligible for trading, a liquid public market has not yet developed.&nbsp;&nbsp;We cannot predict the future prices at which our shares will trade, or the liquidity of a public market for our shares of common stock, should one develop.</TD></TR>
</TABLE>


<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The number of shares of our common stock issued and outstanding is based on 42,001,251 shares of our common
stock issued and outstanding, including 4,282,666 shares of our common stock offered pursuant to this offering, and excludes 500,000
shares of our common stock which have vested but have not yet been issued and 27,985,919 shares of our common stock issuable upon
exercise of our currently outstanding warrants or options, and issuable upon conversion of our currently outstanding Notes.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Beginning in May 2015, we conducted an offering
of up to $4,000,000 of restricted shares of the Company&rsquo;s common stock, no par value per share (the &ldquo;May Offering
Shares&rdquo;), at $0.60 per share to certain accredited and non-accredited investors (the &ldquo;May Stock Offering&rdquo;),
in reliance upon the exemptions provided in the Securities Act of 1933, as amended, including Regulation D, Rule 501. The May
Stock Offering consisted of one or more closings and ended on November 6, 2015, pursuant to two extension authorized by the Company&rsquo;s
Board of Directors (the &ldquo;Board&rdquo;). The Company engaged a broker-dealer to assist in the May Stock Offering.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Beginning in November 2015, we conducted an offering of up to $2,000,000 of
restricted shares of the Company&rsquo;s common stock, no par value per share (the &ldquo;November Offering Shares&rdquo;),
at $1.00 per share to certain accredited and non-accredited investors (the &ldquo;November Stock Offering&rdquo;), in
reliance upon the exemptions provided in the Securities Act of 1933, as amended, including Regulation D, Rule 501. The
November Stock Offering will consist of one or more closings and will end on February 15, 2016. The Company engaged a broker-dealer to assist in the November Stock
Offering.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">The May Offering Shares and the November Offering
Shares will hereinafter be collectively referred to as the &ldquo;Offering Shares&rdquo;, and the May Stock Offering and November
Stock Offering will hereinafter be collectively referred to as the &ldquo;Stock Offerings&rdquo;.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Offering Shares in both Stock Offerings
were offered pursuant to subscription agreements with each investor (each, a &ldquo;Subscription Agreement&rdquo;). In connection
with each Subscription Agreement, the Company entered into a registration rights agreement with each investor (each, a &ldquo;2015
Registration Rights Agreement&rdquo;), whereby the Company agreed to prepare and file a registration statement with the SEC to
register the Offering Shares within one hundred fifty (150) days after date of the applicable 2015 Registration Rights Agreement.
If the Company could not file the registration statement by such date for each applicable 2015 Registration Rights Agreement,
the Company would have been required to pay a filing default penalty to the applicable investor equal to two percent (2%) of the
gross proceeds paid by such investor. The 2015 Registration Rights Agreement shall collectively refer to substantively identical
registration rights agreements entered into in both Stock Offerings.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">On June 12, 2015, the Company completed an
initial closing of the May Stock Offering and entered into Subscription Agreements and 2015 Registration Rights Agreements with
investors representing aggregate gross proceeds to the Company of $1,280,000, and thereafter issued 2,133,333 shares of its common
stock. On August 14, 2015, the Company completed a second closing of the offering and entered into Subscription Agreements and
2015 Registration Rights Agreements with investors representing aggregate gross proceeds to the Company of $729,600, and issued
1,216,000 shares of its common stock in connection therewith. On November 6, 2015, the Company completed a second closing of the
offering and entered into Subscription Agreements and 2015 Registration Rights Agreements with investors representing aggregate
gross proceeds to the Company of $260,000, and issued 433,333 shares of its common stock in connection therewith. The May Stock
Offering ended on November 6, 2015, resulting in aggregate gross proceeds to the Company of $2,269,600.40.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">On December 24, 2015, the Company completed
an initial closing of the November Stock Offering and entered into Subscription Agreements and 2015 Registration Rights Agreements
with investors representing aggregate gross proceeds to the Company of $500,000, and thereafter issued 500,000 shares of its common
stock.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B></B></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>SUMMARY FINANCIAL DATA</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The following summary of our financial data
should be read in conjunction with, and is qualified in its entirety by reference to &ldquo;Management&rsquo;s Discussion and
Analysis of Financial Condition and Results of Operations&rdquo; and our consolidated financial statements, appearing elsewhere
in this prospectus.&nbsp;&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>Statements of Operations Data</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="text-align: center; vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>For the year ended </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>December 31, 2014</B></P></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>For the nine-months ended </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>September 30, 2015</B></P></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; padding-left: 5.4pt">Revenue</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 30%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="text-align: right; width: 30%">$2,482,035</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Profit/(Loss) from Operations</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(4,799,696</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$(3,454,818)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Other Income/(Expense)</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(2,005,053</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$(9,631,670)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Net Income/(Loss)</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(6,804,749</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$(13,086,489)</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>Balance Sheet Data</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="text-align: center; vertical-align: bottom">
    <TD STYLE="margin: 0">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid"><B>December 31, 2014</B></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>For the nine-months ended </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>September 30, 2015</B></P></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; text-align: left; padding-left: 5.4pt">Current Assets*</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 30%; text-align: right">1,271,130</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="text-align: right; width: 30%">$1,316,597</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Total Assets*</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">11,243,035</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$9,356,496</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Total Liability</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">20,116,214</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$28,853,187</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Total Stockholders&rsquo; (Deficit)</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(8,873,179</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$(19,496,691)</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">* There is a non-material variation between amounts reflected in the Unaudited
Financial Statements for the period ended September 30, 2015 and the Audited Financial Statement for the period
ended December 31, 2014 and 2013, due solely to rounding. The amounts reflected in this prospectus align with amounts
reflected in the Unaudited Financial Statements for the period ended September 30, 2015.</P>



<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B></B></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>RISK FACTORS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><I>Investing in our common stock involves
a high degree of risk.&nbsp;&nbsp;You should carefully consider the following risk factors before deciding whether to invest in
the Company.&nbsp;If any of the events discussed in the risk factors below occur, our business, financial condition, results of
operations or prospects could be materially and adversely affected.&nbsp;&nbsp;In such case, the value and marketability of the
common stock could decline. Additional risks and uncertainties that we do not presently know or that we currently deem immaterial
may also impair our business, financial condition, operating results and prospects.</I></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Risks Relating to our Business</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Our ability to generate revenue to support
our operations is uncertain.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">We are in the early stage of our business
and have a limited history of generating revenues. We have a limited operating history upon which you can evaluate our potential
for future success, and we are subject to the additional risks affecting early-stage businesses. Rather than relying on historical
information, financial or otherwise, to evaluate our Company, you should evaluate our Company in light of your assessment of the
growth potential of our business and the expenses, delays, uncertainties, and complications typically encountered by early-stage
businesses, many of which will be beyond our control. Early-stage businesses in rapidly evolving markets commonly face risks,
such as the following:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">unanticipated problems, delays, and expenses relating to the development and implementation
of their business plans;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">operational difficulties;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">lack of sufficient capital;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">competition from more advanced enterprises; and</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">uncertain revenue generation.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Our limited operating history may make
it difficult for us to accurately forecast our operating results.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">Our planned expense levels are, and will continue
to be, based in part on our expectations, which are difficult to forecast accurately based on our stage of development and factors
outside of our control. We may be unable to adjust spending in a timely manner to compensate for any unexpected developments.
Further, business development expenses may increase significantly as we expand operations. To the extent that any unexpected expenses
precede, or are not rapidly followed by, a corresponding increase in revenue, our business, operating results, and financial condition
may be materially and adversely affected.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>We have a history of losses that may
continue, which may negatively impact our ability to achieve our business objectives.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">We have incurred net losses since our inception.
The Company&rsquo;s net loss from inception to December 31, 2014, is approximately $15,324,264. We cannot assure you that we can
achieve or sustain profitability on a quarterly or annual basis in the future. There can be no assurance that future operations
will be profitable. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact
on us.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Our independent registered accounting
firm has expressed concerns about our ability to continue as a going concern.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">The report of our independent registered accounting
firm expresses concern about our ability to continue as a going concern based on insufficient working capital, a stockholders&rsquo;
deficit and recurring net losses. This means there is substantial doubt that we can continue as an on-going business unless we
can support our working capital and ongoing operational cost requirements through increased revenue or additional capital raising
efforts. It is not possible at this time for us to predict with assurance the potential success of our management&rsquo; business
plan. The revenue and income potential of our business and operations are unknown. If we cannot continue as a viable entity, we
may be unable to continue our operations and you may lose some or all of your investment in our common stock.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>We operate in a highly competitive industry
and if we are unable to compete successfully our revenue and profitability will be adversely affected.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">We face strong competition from manufacturers
and distributors of lighting and fan fixtures, worldwide. Many of our competitors have stronger capitalization than we do, have
strong existing customer relationships and more extensive engineering, manufacturing, sales and marketing capabilities. Competitors
could focus their substantial resources on developing a competing technology that may be potentially more attractive to customers
than our products or services. In addition, we may face competition from other products with existing technologies. Our competitors
may also offer competitive products at reduced prices in order to improve their competitive positions. Any of these competitive
factors could make it more difficult for us to attract and retain customers, require us to lower our prices in order to remain
competitive, and reduce our revenue and profitability, any of which could have a material adverse effect on our results of operations
and financial condition.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Our success depends on our ability to
expand, operate, and successfully manage our operations.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">Our success depends on our ability to design
products popular with customers and consumers, effectively market our products, manage third party manufacturing operations in
China, and successfully manage our operations. Our ability to successfully accomplish these objects will depend upon a number
of factors, including the following:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">signing with strategic distribution partners with established retail and wholesale
relationships;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">the continued development of our business;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">the hiring, training, and retention of competent personnel;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">the ability to design products that generates customer demand;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">the ability to enhance our operational, financial, and management systems;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">the availability of adequate financing;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">competitive factors; and</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">general economic and business conditions.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>If we are unable to obtain additional
capital, our business operations could be harmed.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">The expansion of our business will require
additional funds to support inventories and accounts receivable. In the future, we expect to seek additional equity or debt financing
to provide for our working. Such financing may not be available or may not be available on satisfactory terms to us. If financing
is not available on satisfactory terms, we may be unable to expand our operations to achieve our objectives. While debt financing
will enable us to expand our business more rapidly than we otherwise would be able to do, debt financing increases expenses and
we must repay the debt regardless of our operating results. Future equity financings could result in dilution to our stockholders.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The recent global financial crisis, which
has included, among other things, significant reductions in available capital and liquidity from banks and other providers of
credit, substantial reductions or fluctuations in equity and currency values worldwide, and concerns that the worldwide economy
may enter into a prolonged recessionary period, may make it difficult for us to raise additional capital or obtain additional
credit, when needed, on acceptable terms or at all.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Our inability to obtain adequate capital resources,
whether in the form of equity or debt, to fund our business and growth strategies, may require us to delay, scale back, or eliminate
some or all of our operations, which may adversely affect our financial results and ability to operate as a going concern.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>The success of our business depends
on the market acceptance of products with our proprietary technology.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">Our future success depends on the market acceptance
of our proprietary safety quick technology and our products in which our technology is imbedded. If we are unable to convince
current and potential customers of the advantages of our proprietary technology, then our ability to sell our lighting and fan
products will be limited. If the market for our proprietary technology does not develop, or if the market does not accept our
products, then our ability to grow our business could be limited.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>We depend on a limited number of third
party manufacturers.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">We depend on certain key manufacturers for
our current products. If these relationships become strained, our results of operations and financial condition could be materially
adversely affected.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>We may depend upon a limited number
of customers in any given period to generate a substantial portion of our revenue.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">Our industry does not lend to long-term customer
contracts, and our dependence on individual key customers can vary from period to period as a result of consumer demands among
others variables. As a result, we may experience more customer concentration in any given future period. The loss of, or substantial
reduction in sales to, any of our significant customers could have a material adverse effect on our results of operations in any
given future period.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>We may need to raise additional financing
to support our operations, but we cannot be sure that we will be able to obtain additional financing on terms favorable to us
when needed. If we are unable to obtain additional financing to meet our needs, our operations may be adversely affected or terminated.</I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We have limited financial resources. There
can be no assurance that we will be able to obtain financing to fund our operations in light of factors beyond our control such
as the market demand for our securities, the state of financial markets, generally, and other relevant factors. Any sale of our
common stock in the future may result in dilution to existing stockholders. Furthermore, there is no assurance that we will not
incur debt in the future, that we will have sufficient funds to repay any future indebtedness or that we will not default on our
future debts, which would thereby jeopardize our business viability. Finally, we may not be able to borrow or raise additional
capital in the future to meet our needs or to otherwise provide the capital necessary to continue the development of our technology,
which might</P>

<P STYLE="margin: 0; text-align: justify">result in the loss of some or all of your
investment in our common stock.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>If we obtain debt financing, we will
face risks associated with financing our operations.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">If we obtain debt financing, we will be subject
to the normal risks associated with debt financing, including the risk that our cash flow will be insufficient to meet required
payments of principal and interest and the risk that we will not be able to renew, repay, or refinance our debt when it matures
or that the terms of any renewal or refinancing will not be as favorable as the existing terms of that debt. If we enter into
secured lending facilities and are unable to pay our obligations to our secured lenders, they could proceed against any or all
of the collateral securing our indebtedness to them.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;<B><I>We may acquire other businesses,
license rights to technologies or products, form alliances, or dispose of or spin-off businesses, which could cause us to incur
significant expenses and could negatively affect profitability.</I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We may pursue acquisitions, technology-licensing
arrangements, and strategic alliances, or dispose of or spin-off some of our businesses, as part of our business strategy. We
may not complete these transactions in a timely manner, on a cost-effective basis, or at all, and may not realize the expected
benefits. If we are successful in making an acquisition, the products and technologies that are acquired may not be successful
or may require significantly greater resources and investments than originally anticipated. We may not be able to integrate acquisitions
successfully into our existing business and could incur or assume significant debt and unknown or contingent liabilities. We could
also experience negative effects on our reported results of operations from acquisition or disposition-related charges, amortization
of expenses related to intangibles and charges for impairment of long-term assets.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>We depend on our officers, key employees and agents who would
be difficult to replace, and our business will likely be harmed if we lose their services or cannot hire additional qualified
personnel.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">Our success depends substantially on the efforts
and abilities of our officers, and other key employees and agents. The Company has an employment agreement with its chief executive
officer but we do not think this agreement limits such employee&rsquo;s ability to terminate his employment; the Company also
has a consulting agreement with Rani Kohen, the Company&rsquo;s founder. We do not have key person life insurance on chief executive
officer; we do not have key person life insurance covering any of our other officers or other key employees or agents, including
Mr. Kohen. The loss of services of one or more of our officers or key employees or agents or the inability to add key personnel
could have a material adverse effect on our business. Competition for experienced personnel in our industry is substantial. Our
success depends in part on our ability to attract, hire, and retain qualified personnel. In addition, if any of our officers or
other key employees join a competitor or form a competing company, we may lose some of our customers.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>If we experience rapid growth and we
are not able to manage this growth successfully, this inability to manage the growth could adversely affect our business, financial
condition, and results of operations.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">Rapid growth places a significant strain on
our financial, operational, and managerial resources. While we engage in strategic and operational planning to adequately manage
anticipated growth, there can be no assurance that we will be able to implement and subsequently improve operations and financial
systems successfully and in a timely manner to fully manage our growth. There can be no assurance that we will be able to manage
our growth and any inability to successfully manage growth could materially adversely affect our business, financial condition,
and results of operation.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>We rely on third party manufacturers
to produce our products. We may be unable to achieve our growth and profitability objectives if we cannot secure acceptable third
party manufacturers or existing third party manufacturer relationships dissolve.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">We do not know whether our current or future
manufacturing arrangements will be able to develop efficient, low-cost manufacturing capabilities and processes that will enable
us to meet the quality, price, engineering, design and production standards, or production volumes required to successfully mass
market such products. Even if we are successful in developing manufacturing capabilities and processes, we do not know whether
we will do so in time to meet market demand. Our failure to develop these manufacturing processes and capabilities, if necessary,
in a timely manner could prevent us from achieving our growth and profitability objectives.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Our business may become substantially
dependent on contracts that are awarded through competitive bidding processes.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">We may sell a significant portion of our products
pursuant to contracts that are subject to competitive bidding, including contracts with municipal authorities. Competition for,
and negotiation and award of, contracts present varied risks, including, but not limited to:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">investment of substantial time and resources by management for the preparation of
bids and proposals with no assurance that a contract will be awarded to us;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">the requirement to certify as to compliance with numerous laws (for example, socio-economic,
small business, and domestic preference) for which a false or incorrect certification can lead to civil and criminal penalties;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">the need to estimate accurately the resources and cost structure required to service
a contract; and</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">the expenses and delays that we might suffer if our competitors protest a contract
awarded to us, including the potential that the contract may be terminated and a new bid competition may be conducted.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">If we are unable to win contracts awarded
through the competitive bidding process, we may not be able to operate in the market for products and services that are provided
under those contracts for a number of years. If we are unable to consistently win new contract awards over any extended period,
or if we fail to anticipate all of the costs and resources that will be required to secure and perform such contract awards, our
growth strategy and our business, financial condition, and results of operations could be materially and adversely affected.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>We sell, or will sell, products and
services to companies in industries which tend to be extremely cyclical; downturns in those industries would adversely affect
our results of operations.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">The growth and profitability of our business
will depend on sales to industries that are subject to cyclical downturns. Slowdowns in these industries may adversely affect
sales by our businesses, which in turn would adversely affect our revenues and results of operations.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>We are, or in the future may be, subject
to substantial regulation related to quality standards applicable to our quality processes. Our failure to comply with applicable
quality standards could have an adverse effect on our business, financial condition, or results of operations.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Environmental Protection Agency regulates
the registration, manufacturing, and sales and marketing of products in our industry, and those of our distributors and partners,
in the United States. Significant government regulation also exists in overseas markets. Compliance with applicable regulatory
requirements is subject to continual review and is monitored through periodic inspections and other review and reporting mechanisms.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Failure by us or our partners to comply with
current or future governmental regulations and quality assurance guidelines could lead to product recalls or related field actions,
or product shortages. Efficacy or safety concerns with respect to our products or those of our partners could lead to product
recalls, fines, withdrawals, declining sales, and/or our failure to successfully commercialize new products or otherwise achieve
revenue growth.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>The success of our businesses will depend
on our ability to effectively develop and implement strategic business initiatives.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">We are currently implementing various strategic
business initiatives. In connection with the development and implementation of these initiatives, we will incur additional expenses
and capital expenditures to implement the initiatives. The development and implementation of these initiatives also requires management
to divert a portion of its time from day-to-day operations. These expenses and diversions could have a significant impact on our
operations and profitability, particularly if the initiatives prove to be unsuccessful. Moreover, if we are unable to implement
an initiative in a timely manner, or if those initiatives turn out to be ineffective or are executed improperly, our business
and operating results would be adversely affected.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Failure to successfully reduce our current
or future production costs may adversely affect our financial results.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">A significant portion of our strategy will
rely upon our ability to successfully rationalize and improve the efficiency of our operations. In particular, our strategy relies
on our ability to reduce our production costs in order to remain competitive. If we are unable to continue to successfully implement
cost reduction measures, especially in a time of a worldwide economic downturn, or if these efforts do not generate the level
of cost savings that we expect going forward or result in higher than expected costs, there could be a material adverse effect
on our business, financial condition, results of operations, or cash flows.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>If we are unable to make necessary capital
investments or respond to pricing pressures, our business may be harmed.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">In order to remain competitive, we need to
invest in research and development, customer service and support, and marketing. From time to time, we may have to adjust the
prices of our products and services to remain competitive. We may not have available sufficient financial or other resources to
continue to make investments necessary to maintain our competitive position.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>We have limited product distribution
experience and we expect to rely on third parties who may not successfully sell our products.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">We have limited product distribution experience
and currently rely, and plan to rely primarily, on product distribution arrangements with third parties. We may also license our
technology to certain third parties for commercialization of certain applications. We expect to enter into distribution agreements
and/or licensing agreements in the future, and we may not be able to enter into these agreements on terms that are favorable to
us, if at all. In addition, we may have limited or no control over the distribution activities of these third parties. These third
parties could sell competing products and may devote insufficient sales efforts to our products. As a result, our future revenues
from sales of our products, if any, will depend on the success of the efforts of these third parties.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>We could face significant liabilities
in connection with our technology, products, and business operations, which if incurred beyond any insurance limits, would adversely
affect our business and financial condition. </I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">We are subject to a variety of potential liabilities
connected to our technology development and business operations, such as potential liabilities related to environmental risks.
As a business which markets products for use by consumers and institutions, we may become liable for any damage caused by our
products, whether used in the manner intended or not. Any such claim of liability, whether meritorious or not, could be time-consuming
and/or result in costly litigation. Although we intend to obtain insurance against certain of these risks, no assurance can be
given that such insurance will be adequate to cover related liabilities or will be available in the future or, if available, that
premiums will be commercially justifiable. If we were to incur any substantial liability and related damages were not covered
by our insurance or exceeded policy limits, or if we were to incur such liability at a time when we are not able to obtain liability
insurance, our business, financial conditions, and results of operations could be materially adversely affected.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Our inability to protect our intellectual
property, or our involvement in damaging and disruptive intellectual property litigation, could adversely affect our business,
results of operations and financial condition or result in the loss of use of the product or service.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">We attempt to protect
our intellectual property rights through a combination of patent, trademark, copyright and trade secret laws, as well as third-party
nondisclosure and assignment agreements. Our failure to obtain or maintain adequate protection of our intellectual property rights
for any reason could have a material adverse effect on our business, results of operations and financial condition.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We own United States
and international patents and patent applications for our technologies. We offer no assurance about the degree of protection which
existing or future patents may afford us. Likewise, we offer no assurance that our patent applications will result in issued patents,
that our patents will be upheld if challenged, that competitors will not develop similar or superior business methods or products
outside the protection of our patents, that competitors will not infringe our patents, or that we will have adequate resources
to enforce our patents.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">To protect our trade
secrets and other proprietary information, we generally require employees, consultants, advisors and collaborators to enter into
confidentiality agreements. We cannot assure you that these agreements will provide meaningful protection for our trade secrets,
know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of such trade secrets,
know-how or other proprietary information. If we are unable to maintain the proprietary nature of our technologies, our business
could be materially adversely affected.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We rely on our trademarks,
trade names, and brand names to distinguish our company and our products and services from our competitors.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Some of our trademarks
may conflict with trademarks of other companies. Failure to obtain trademark registrations could limit our ability to protect
our trademarks and impede our sales and marketing efforts. Further, we cannot assure you that competitors will not infringe our
trademarks, or that we will have adequate resources to enforce our trademarks.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">In addition, third
parties may bring infringement and other claims that could be time-consuming and expensive to defend. In addition, parties making
infringement and other claims may be able to obtain injunctive or other equitable relief that could effectively block our ability
to provide our products, services or business methods and could cause us to pay substantial damages. In the event of a successful
claim of infringement, we may need to obtain one or more licenses from third parties, which may not be available at a reasonable
cost, or at all. It is possible that our intellectual property rights may not be valid or that we may infringe existing or future
proprietary rights of others. Any successful infringement claims could subject us to significant liabilities, require us to seek
licenses on unfavorable terms, prevent us selling products, services and business methods and require us to redesign or, in the
case of trademark claims, rebrand our company or products, any of which could have a material adverse effect on our business,
financial condition or results of operations.</P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>The expiration or loss of patent protection
and licenses may affect our future revenues and operating income.</I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Much of our business relies on patent and
trademark and other intellectual property protection. Although most of the challenges to our intellectual property would likely
come from other businesses, governments may also challenge intellectual property protections. To the extent our intellectual property
is successfully challenged, invalidated, or circumvented, or to the extent it does not allow us to compete effectively, our business
will suffer. To the extent that countries do not enforce our intellectual property rights or to the extent that countries require
compulsory licensing of our intellectual property, our future revenues and operating income will be reduced.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Our research and development efforts
may not succeed in developing commercially successful products and technologies, which may cause our revenue and profitability
to decline.</I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">To remain competitive, we must continue to launch new products and technology, and
enhance our current products and technology. To accomplish this, we must commit substantial efforts, funds, and other
resources to research and development. A high rate of failure is inherent in the research and development of new products and
technology. We must make ongoing substantial expenditures without any assurance that its efforts will be commercially
successful. Failure can occur at any point in the process, including after significant funds have been invested. We cannot
state with certainty when or whether any of our products or technology under development will be launched or whether any
products or technologies will be commercially successful. Failure to launch successful new products or technology, or enhance
existing products or technology may cause our products or technology to become obsolete, causing our revenues and operating
results to suffer.&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>New products and technological advances
by our competitors may negatively affect our results of operations.</I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Our products and technology face intense competition
from our competitors&rsquo; products and technology. Competitors&rsquo; products and technology may be more effective, more effectively
marketed or sold, or have lower prices or superior performance features than our products or technology. We cannot predict with
certainty the timing or impact of the introduction of competitors&rsquo; products or technology.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Our costs may grow more quickly than
our revenue, harming our business and profitability. </I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Providing our products or technology to our
customers is costly and we expect our expenses to continue to increase in the future. We expect to continue to invest in our infrastructure
in order to provide our products and technology rapidly and reliably to all customers. Our expenses may be greater than we anticipate,
and our investments to make our business and our infrastructure more efficient may not be successful. In addition, we may increase
marketing, sales, and other operating expenses in order to grow and expand our operations and to remain competitive. Increases
in our costs may adversely affect our business and profitability.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>The loss of our License Agreement with
General Electric could negatively affect our results of operations. </I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We currently have a License Agreement with
General Electric whereby we may market GE Branded ceiling fans and light fixtures with the SQL Power Plug Technology installed
on the product. Through our License Agreement, we have received order indications from major retailers such as Wal-Mart, Target,
Home Depot, Lowes, Costco and ACE Hardware. The loss of this arrangement or the termination of the License Agreement could limit
our ability to secure additional customers and thereby could have a material adverse effect on our profitability and financial
condition.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Other factors can have a material adverse
effect on our future profitability and financial condition.</I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Many other factors can affect our profitability
and financial condition, including:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">changes in, or interpretations of, laws and regulations including changes in accounting
standards and taxation requirements;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">changes in the rate of inflation, interest rates and the performance of investments
held by us;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">changes in the creditworthiness of counterparties that transact business with;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">changes in business, economic, and political conditions, including: war, political
instability, terrorist attacks in the U.S. and other parts of the world, the threat of future terrorist activity in the U.S. and
other parts of the world and related military action; natural disasters; the cost and availability of insurance due to any of
the foregoing events; labor disputes, strikes, slow-downs, or other forms of labor or union activity; and, pressure from third-party
interest groups;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">changes in our business and investments and changes in the relative and absolute contribution
of each to earnings and cash flow resulting from evolving business strategies, changing product mix, changes in tax rates and
opportunities existing now or in the future;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">difficulties related to our information technology systems, any of which could adversely
affect business operations, including any significant breakdown, invasion, destruction, or interruption of these systems;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 3pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">changes in credit markets impacting our ability to obtain financing for our business
operations; or</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">legal difficulties, any of which could preclude or delay commercialization of products
or technology or adversely affect profitability, including claims asserting statutory or regulatory violations, adverse litigation
decisions, and issues regarding compliance with any governmental consent decree.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Risks Related to our Operation and Structure</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>We can provide no assurances as to our
future financial performance or the investment result of a purchase of our common stock.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">Any projected results of operations involve
significant risks and uncertainty, should be considered speculative, and depend on various assumptions which may not be correct.
The future performance of our Company and the return on our common stock depends on a complex series of events that are beyond
our control and that may or may not occur. Actual results for any period may or may not approximate any assumptions that are made
and may differ significantly from such assumptions. We can provide no assurance or prediction as to our future profitability or
to the ultimate success of an investment in our common stock.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>We are subject to corporate governance
and internal control reporting requirements, and our costs related to compliance with, or our failure to comply with existing
and future requirements, could adversely affect our business.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">We face corporate governance requirements under the Sarbanes-Oxley Act of 2002, as well
as new rules and regulations subsequently adopted by the SEC and the Public Company Accounting Oversight Board. These laws, rules,
and regulations continue to evolve and may become increasingly stringent in the future. We will be required to evaluate our internal
control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (&ldquo;Section 404&rdquo;). We are a smaller
reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;).
Section 404 requires us to include an internal control report with our Annual Report on Form 10-K. The report must include management&rsquo;s
assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. This report
must also include disclosure of any material weaknesses in internal control over financial reporting that we have identified.
Failure to comply, or any adverse results from such evaluation, could result in a loss of investor confidence in our financial
reports and have an adverse effect on the trading price of our securities. We will strive to continuously evaluate and improve
our control structure to help ensure that we comply with Section 404. The financial cost of compliance with these laws, rules,
and regulations is expected to remain substantial. We cannot assure you that we will be able to fully comply with these laws,
rules, and regulations that address corporate governance, internal control reporting, and similar matters. Failure to comply with
these laws, rules, and regulations could materially adversely affect our reputation, financial condition, and the value of our
securities.</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>As a public company, we have significant
operating costs relating to compliance requirements and our management is required to devote substantial time to compliance initiatives.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">Our management has only limited experience
operating as a public company. To operate effectively, we will be required to continue to implement changes in certain aspects
of our business and develop, manage, and train management level and other employees to comply with on-going public company requirements.
Failure to take such actions, or delay in the implementation thereof, could have a material adverse effect on our business, financial
condition, and results of operations.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Sarbanes-Oxley Act, as well as rules subsequently
implemented by the SEC, impose various requirements on public companies, including requiring establishment and maintenance of
effective disclosure and financial controls and changes in corporate governance practices. Our management and other personnel
will need to devote a substantial amount of time to these new compliance initiatives. Moreover, these rules and regulations will
increase our legal and financial compliance costs and will make some activities more time-consuming and costly.</P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B>Risks Related to our Common Stock</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Future issuances of our common stock,
or securities convertible or exercisable into our common stock, could dilute current stockholders or adversely affect the market.</I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Future issuances of our common stock, or securities convertible or exercisable into
our common stock, could be at values substantially below the price paid by the current holders of our common stock. In
addition, common stock could be issued to fend off unwanted tender offers or hostile takeovers without further stockholder
approval. Sales of substantial amounts of our common stock, or even just the prospect of such sales, could depress the
prevailing price of our common stock and our ability to raise equity capital in the future.</P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>A liquid public market for our common
stock has not developed, and we cannot predict the future prices or the amount of liquidity of our common stock</I></B><I>.</I></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">On September 15, 2015, FINRA cleared a request to establish a market in shares of
our common stock. On October 8, 2015, OTC Markets Group announced that the Company was verified for trading on the OTCQB&reg;
Venture Market, and shares of our common stock are currently quoted under the symbol &ldquo;SQFL&rdquo;. Presently, shares of
our common stock not subject to restriction are eligible for trading in the OTCQB&reg; Venture Market. However, to the
Company's knowledge, only a small percentage of our total issued and outstanding shares of common stock have been deposited
with broker/dealers as of the date of this prospectus, and no shares of our common stock have yet been offered
for sale. Therefore, while our shares of common stock are eligible for trading, a liquid public market has not yet developed.
We cannot predict the future prices at which our shares will trade, or the liquidity of a public market for our shares of
common stock, should one develop.</P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>We will be subject to the &ldquo;penny
stock&rdquo; rules which will adversely affect the liquidity of our common stock</I></B><I>. </I></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The SEC, has adopted regulations which generally
define &ldquo;penny stock&rdquo; to be an equity security that has a market price of less than $5.00 per share, subject to specific
exemptions. We expect the market price of our common stock will be less than $5.00 per share and therefore we will be considered
a &ldquo;penny stock&rdquo; according to SEC rules. This designation requires any broker-dealer selling these securities to disclose
certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser
is reasonably suitable to purchase the securities. These rules limit the ability of broker-dealers to solicit purchases of our
common stock and therefore reduce the liquidity of the public market for our shares should one develop.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Terms of subsequent financings may adversely
impact your investment</I>. </B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We may have to raise equity, equity-linked and/or debt financing in the future.
Your rights and the value of your investment in our common stock could be reduced. For example, if we issue secured
debt securities, the holders of the debt would have a claim against our assets that would be prior to the rights of
stockholders until the debt is paid. Interest on these debt securities would increase costs and negatively impact operating
results.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>It is not likely that we will pay dividends
on the common stock or any other class of stock. </I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We intend to retain any future earnings for
the operation and expansion of our business. We do not anticipate paying cash dividends on our common stock, or any other class
of stock, in the foreseeable future. Stockholders should look solely to appreciation in the market price of our common shares
to obtain a return on investment.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>A significant number of our shares will
be eligible for sale and their sale or potential sale may depress the market price of our common stock.</I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Sales of a significant number of shares of
our common stock in the public market could harm the market price of our common stock. This prospectus covers 4,282,666 shares
of our common stock and 63,485,919 shares were registered pursuant to our registration statement first declared effective on November
22, 2014, which collectively represents over 95% of our current issued and outstanding shares of our common stock, as well as
the common stock underlying certain options and warrants with respect to our common stock, as well as common stock issuable upon
conversion of the Notes. As additional shares of our common stock become available for resale in the public market pursuant to
this offering, and otherwise, the supply of our common stock will increase, which could decrease its price.&nbsp;&nbsp;In addition
some or all of the shares of common stock may be offered from time to time in the open market pursuant to Rule 144, and these
sales may have a depressive effect on the market for our shares of common stock.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Our stockholders may experience significant
dilution from the conversion of the Notes and exercise of Warrants and options to purchase shares of our common stock</I></B><I>.
</I></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">We currently have outstanding Notes convertible into 18,056,935 shares of
our common stock at an exercise price of $0.25 per share. Further, we currently have outstanding Warrants and options to purchase
up to an aggregate of 9,928,984 shares of our common stock at an exercise price of $0.375 per share. Accordingly, if
such Notes, Warrants and options are exercised, in whole or part, prior to their expiration dates, you may
experience substantial dilution upon the conversion or exercise of these Notes, Warrants or options. In addition, the
likelihood of such dilution may be accelerated if the price of our common stock increases to a level greater than the
exercise price of these warrants.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Our common stock will not remain eligible
for quotation on the OTCQB if we do not remain current in our filings with the Securities and Exchange Commission (the &ldquo;SEC&rdquo;).</I></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We must remain current in our filings with
the SEC in order for shares of our common stock to remain eligible for quotation on the OTCQB&reg; Venture Market. In the event
that we become delinquent in our required filings with the SEC, quotation of our common stock will be terminated following a 30
day grace period if we do not make our required filing during that time. If our common stock becomes ineligible for quotation
on the OTCQB&reg; Venture Market, investors in our common stock may find it difficult to sell their shares. Regardless of whether
our common stock is quoted on an over-the-counter bulletin board, under Section 15(d) of the Exchange Act, we are required to
file periodic reports with the SEC.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>We are classified as an &ldquo;emerging
growth company&rdquo; as well as a &ldquo;smaller reporting company&rdquo; and we cannot be certain if the reduced disclosure
requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive
to investors.</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify">We are an &ldquo;emerging growth company,&rdquo;
as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable
to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common
stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result,
there may be a less active trading market for our common stock and our stock price may be more volatile.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">Section 107 of the JOBS Act provides that
an &ldquo;emerging growth company&rdquo; can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an &ldquo;emerging growth company&rdquo;
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have
irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section
107(b) of the JOBS Act.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We could remain an &ldquo;emerging
growth company&rdquo; for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our
annual gross revenues exceed $1 billion, (ii) the date that we become a &ldquo;large accelerated filer&rdquo; as defined in
Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates
exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on
which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Notwithstanding the above, we are also currently
a &ldquo;smaller reporting company.&rdquo; Specifically, similar to &ldquo;emerging growth companies,&rdquo; &ldquo;smaller reporting
companies&rdquo; are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions
of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation
report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations
in their SEC filings. Decreased disclosures in our SEC filings due to our status as an &ldquo;emerging growth company&rdquo; or
&ldquo;smaller reporting company&rdquo; may make it harder for investors to analyze our results of operations and financial prospects.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">This prospectus contains forward-looking statements,
within the meaning of Section&nbsp;27A of the Securities Act and the Exchange Act, that involve risk and uncertainties. Any statements
contained in this prospectus that are not statements of historical fact may be forward-looking statements. When we use the words
such as &ldquo;may,&rdquo; &ldquo;will,&rdquo; &ldquo;should,&rdquo; &ldquo;estimates,&rdquo; &ldquo;predicts,&rdquo; &ldquo;potential,&rdquo;
&ldquo;continue,&rdquo; &ldquo;strategy,&rdquo; &ldquo;believes,&rdquo; &ldquo;anticipates,&rdquo; &ldquo;plans,&rdquo; &ldquo;expects,&rdquo;
&ldquo;intends&rdquo; and similar expressions are intended to identify forward-looking statements. Forward-looking statements
involve risks and uncertainties which may cause our actual results, performance or achievements to be materially different from
those expressed or implied by forward-looking statements. These factors include, among others:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">current or future financial performance;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">management&rsquo;s plans and objectives for future operations;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">uncertainties associated with product research and development;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">uncertainties associated with dependence upon the actions of government regulatory
agencies;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">product plans and performance;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">management&rsquo;s assessment of market factors; and</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">statements regarding our strategy and plans.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>TAX CONSIDERATIONS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We are not providing any tax advice as to
the acquisition, holding or disposition of the securities offered herein. In making an investment decision, investors are strongly
encouraged to consult their own tax advisor to determine the U.S. federal, state and any applicable foreign tax consequences relating
to their investment in our securities.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>USE OF PROCEEDS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We will not receive any proceeds from the
sale of the common stock by the selling security holders pursuant to this prospectus. The selling security holders named herein
will receive all proceeds from the sale of the shares of our common stock in this offering. Please see Selling Security Holders&rdquo;
beginning at page 20.&nbsp;&nbsp;We will pay all expenses (other than transfer taxes) of the selling security holders in connection
with this offering.&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B></B></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>CAPITALIZATION</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The following table sets forth our capitalization
as of&nbsp;December 31, 2014.&nbsp;&nbsp;The table should be read in conjunction with the consolidated financial statements and
related notes included elsewhere in this prospectus:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>As&nbsp;of</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>December 31, 2014</B></P></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Stockholders&rsquo; deficit:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%">Common stock, $0 par value;</TD><TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">127,400</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,359,127</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accumulated deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(15,324,264</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total stockholders&rsquo; deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(8,837,737</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Noncontrolling interest</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(35,442</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total Deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,873,179</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>DETERMINATION OF THE OFFERING PRICE</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Shares of the Company&rsquo;s common stock
are quoted on the OTCQB&reg; Venture Market under the symbol &ldquo;SQFL&rdquo;. However, while our shares of common stock are
eligible for trading, a liquid public market has not yet developed. The selling security holders will offer common stock of the
Company at the prevailing market price at the time of sale, or at privately negotiated prices. The offer price of our common stock
does not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other
established criteria of value.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>MARKET FOR COMMON STOCK</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Shares of the Company&rsquo;s common stock
are quoted on the OTCQB&reg; Venture Market under the symbol &ldquo;SQFL&rdquo;. To the Company's knowledge, only a small percentage
of our total issued and outstanding shares of common stock have been deposited with broker/dealers as of the date of this prospectus,
and no shares of our common stock have yet been offered for sale. Therefore, while our shares of common stock are eligible for
trading, a liquid public market has not yet developed. We cannot predict the future prices at which our shares will trade, or
the liquidity of a public market for our shares of common stock, should one develop.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">As of January 11, 2016, there were 85 holders
of record of the Company&rsquo;s common stock.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">As of January 11, 2016, 500,000,000 shares
of common stock, no par value per share, and 20,000,000 shares of preferred stock, no par value per share, were authorized. As
of January 11, 2016, there were 42,001,251 shares of common stock issued and outstanding and no shares of preferred stock issued
and outstanding.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">As of January 11, 2016, 27,785,919 shares
of our common stock were subject to convertible notes or warrants to purchase our common stock. 200,000 shares of common stock
issuable upon the exercise of options which had not vested as of the date of this report and will not vest within 60 days and/or
contain performance-based vesting conditions, are not covered by this report. In addition, 500,000 shares of our common stock
have vested pursuant to the CEO Agreement, but have not yet been issued by the Company.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>DIVIDEND POLICY</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We have never paid any cash dividends on our
common stock and anticipate that, for the foreseeable future, no cash dividends will be paid on our common stock.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B></B></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>THE STOCK OFFERINGS</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">Beginning in May 2015, we conducted the May
Stock Offering of up to $4,000,000 of restricted shares of the Company&rsquo;s common stock, no par value per share, at $0.60
per share to certain accredited and non-accredited investors, in reliance upon the exemptions provided in the Securities Act of
1933, as amended, including Regulation D, Rule 501. The May Stock Offering consisted of one or more closings and ended on November
6, 2015, pursuant to two extension authorized by the Company&rsquo;s Board. The Company engaged a broker-dealer to assist in the
May Stock Offering.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Beginning in November 2015, we conducted the November Stock Offering of up to
$2,000,000 of restricted shares of the Company&rsquo;s common stock, no par value per share, at $1.00 per share to certain
accredited and non-accredited investors, in reliance upon the exemptions provided in the Securities Act of 1933, as amended,
including Regulation D, Rule 501. The November Stock Offering will consist of one or more closings and will end on February
15, 2016. The Company engaged a broker-dealer to
assist in the November Stock Offering.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The May Offering Shares and the November Offering
Shares are collectively referred to as the &ldquo;Offering Shares&rdquo;, and the May Stock Offering and November Stock Offering
are collectively referred to as the &ldquo;Stock Offerings&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Offering Shares in both Stock Offerings
were offered pursuant to a Subscription Agreement with each investor. In connection with each Subscription Agreement, the Company
entered into a 2015 Registration Rights Agreement with each investor, whereby the Company agreed to prepare and file a registration
statement with the SEC to register the Offering Shares within one hundred fifty (150) days after date of the applicable 2015 Registration
Rights Agreement. If the Company could not file the registration statement by such date for each applicable 2015 Registration
Rights Agreement, the Company would have been required to pay a filing default penalty to the applicable investor equal to two
percent (2%) of the gross proceeds paid by such investor. The 2015 Registration Rights Agreement shall collectively refer to substantively
identical registration rights agreements entered into in both Stock Offerings.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">On June 12, 2015, the Company completed an initial closing of the May Stock
Offering and entered into Subscription Agreements and 2015 Registration Rights Agreements with investors representing
aggregate gross proceeds to the Company of $1,280,000, and thereafter issued 2,133,333 shares of its common stock. On August
14, 2015, the Company completed a second closing of the offering and entered into Subscription Agreements and 2015
Registration Rights Agreements with investors representing aggregate gross proceeds to the Company of $729,600, and issued
1,216,000 shares of its common stock in connection therewith. On November 6, 2015, the Company completed a second closing of
the offering and entered into Subscription Agreements and 2015 Registration Rights Agreements with investors representing
aggregate gross proceeds to the Company of $260,000, and issued 433,333 shares of its common stock in connection therewith.
The May Stock Offering ended on November 6, 2015, resulting in aggregate gross proceeds to the Company of $2,269,600.40.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">On December 24, 2015, the Company completed
an initial closing of the November Stock Offering and entered into Subscription Agreements and 2015 Registration Rights Agreements
with investors representing aggregate gross proceeds to the Company of $500,000, and thereafter issued 500,000 shares of its common
stock.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Net proceeds from the Stock Offerings were
used for the Company&rsquo;s general working capital. Additional information concerning the use of proceeds from the Stock Offerings
can be found in the subsection titled &ldquo;Liquidity and Capital Resources&rdquo; found in the section &ldquo;Management&rsquo;s
Discussion and Analysis of Financial Condition and Results of Operations&rdquo;, which is incorporated by reference into this
section.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company sold the Offering Shares in a
private placement in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act and Regulation
D promulgated thereunder since, among other things, the Stock Offerings did not involve a public offering. Additionally, the Company
relied on similar exemptions under applicable state laws. The investors in the Stock Offerings had access to information about
the Company and their investments, took the Offering Shares for investment and not resale, and the Company took appropriate measures
to restrict the transfer of the Offering Shares. Upon issuance, the Offering Shares were not registered under the Securities Act
and could not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">The foregoing is only a brief description
of the material terms of the Subscription Agreements and 2015 Registration Rights Agreements, both of which are filed as an exhibit
hereto, and does not purport to be a complete description of the rights and obligations of the parties thereunder; such descriptions
are qualified in their entirety by reference to such exhibits. The representations, warranties and covenants contained in the
Subscription Agreement were made solely for the benefit of the parties to the agreement and may be subject to limitations agreed
upon by the contracting parties. Accordingly, the Subscription Agreements are referenced herein only to provide investors with
information regarding its terms and not to provide investors with any other factual information regarding the Company or its business,
and should be read in conjunction with the disclosures in the Company&rsquo;s periodic reports and other SEC filings.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>SELLING SECURITY HOLDERS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The following table provides information about
each selling security holder including how many shares of our common stock they owned as of January 11, 2016, how many shares
are offered for sale by this prospectus, and the number and&nbsp;percentage of outstanding shares each selling security holder
will own after this offering, assuming all shares covered by this prospectus are sold.&nbsp;&nbsp;Except as disclosed in this
prospectus, none of the selling security holders have had any position, office, or material relationship with us or our affiliates
within the past three years. The information concerning beneficial ownership has been taken from our stock transfer records and
information provided by the selling security holders.&nbsp;&nbsp;Information concerning the selling security holders may change
from time to time, and any changed information will be set forth if and when required in prospectus supplements or other appropriate
forms permitted to be used by the SEC.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We do not know when or in what amounts a selling
security holder may offer shares for sale. The selling security holders may not sell any or all of the shares offered by this
prospectus. Because the selling security holders may offer all or some of the shares, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the shares, we cannot estimate the number of the shares that
will be held by the selling security holders after completion of this offering.&nbsp;&nbsp;However, for purposes of this table,
we have assumed that, after completion of this offering, all of the shares covered by this prospectus will be sold by the selling
security holder.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Unless otherwise indicated, the selling security
holders have sole voting and investment power with respect to their shares of common stock.&nbsp;&nbsp;All of the information
contained in the table below is based upon information provided to us by the selling security holders, and we have not independently
verified this information.&nbsp;&nbsp;The selling security holders may have sold, transferred or otherwise disposed of, or may
sell, transfer or otherwise dispose of, at any time or from time to time since the date on which it provided the information regarding
the shares beneficially owned, all or a portion of the shares beneficially owned in transactions exempt from the registration
requirements of the Securities Act.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The number of shares outstanding and the percentages of beneficial ownership are
based on 42,001,251 shares of our common stock issued and outstanding as of January 11, 2016.&nbsp;&nbsp;For the purposes of
the following table, the number of shares common stock beneficially owned has been determined in accordance with Rule 13d-3
under the Exchange Act, and such information is not necessarily indicative of beneficial ownership for any other
purpose.&nbsp;&nbsp;Under Rule 13d-3, beneficial ownership includes any shares as to which a selling security holder has sole
or shared voting power or investment power and also any shares which that selling security holder has the right to acquire
within 60 days of the date of this prospectus through the exercise of any stock option, warrant or other rights.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD STYLE="text-align: justify; border-bottom: Black 1pt solid">Selling Security Holder</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Number&nbsp;of securities beneficially owned&nbsp;before Offering</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Number of securities to be offered</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Number&nbsp;of securities owned after Offering</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Percentage&nbsp;of securities beneficially owned after Offering</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; padding-left: 5.75pt">Dov Shiff (1)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">14,964,618</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">1,670,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">13,294,618</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">28.72</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Christopher Davis (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,135,182</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">516,666</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">618,516</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.46</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.75pt">John P. Campi (3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,050,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">750,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.76</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.75pt">LeFam Family Limited Partnership (4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">250,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">250,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Sandeep Gauba</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Serge Kremer (5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">788,246</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">170,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">618,246</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.45</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Tariq Masood (6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">671,506</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">170,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">501,506</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.18</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Fortuny LLC (7)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">166,666</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">166,666</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Martin Thirer &amp; Meg Thirer TEN ENT</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">130,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">130,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Keith Wilson &amp; Terry Wilson JTWROS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">116,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">116,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Keith Weitzman</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Jonathan Sieff</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">84,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">84,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Steven Siegelaub &amp; Deborah Siegelaub TEN ENT</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">83,333</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">83,333</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Steven E. Harris</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Yosi Amster</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Dirk Horn (7)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">349,973</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">307,973</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Donald Wright (9)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">817,070</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">775,403</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.82</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Frank Esposito</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Ryan A. Engh (10)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">586,036</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,333</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">552,703</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.30</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.75pt">The Feldman Family Trust (11)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">404,370</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">387,703</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.75pt">James R. Campi (12)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Joseph H. Kraus</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.75pt">Christina M. Belli &amp; Leonard P. Belli JTWROS (13)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">* Less than 1%</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(1)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. Dov Shiff is currently a member of the Company's Board of Directors. The 14,964,618
shares of common stock include (i) 10,674,618 shares of common stock owned by Mr. Shiff, of which 1,670,000 were obtained pursuant
to the May Stock Offering, (ii) 1,690,000 shares of common stock issuable upon exercise of warrants issued pursuant to the Notes
Offering and (iii) 2,600,000 shares of common stock issuable upon conversion of the Notes issued pursuant to the Notes Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(2)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The 1,135,182 shares of common stock include (i) 635,182 shares of common stock, of
which 516,666 were obtained pursuant to the Stock Offerings, (ii) 100,000 shares of common stock issuable upon exercise of warrants
issued pursuant to the Notes Offering and (ii) 400,000 shares of common stock issuable upon conversion of the Notes issued pursuant
to the Notes Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(3)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. John P. Campi is currently the Company's Chief Executive Officer. The 1,050,000
shares of our common stock include (i) 750,000 shares of common stock obtained pursuant to the CEO Agreement, all of which have
vested, but 500,000 shares of which have not yet been issued, (ii) 250,000 shares of common stock obtained pursuant to the May
Stock Offering, and (iii) 50,000 shares of common stock obtained pursuant to the November Stock Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(4)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Ms. Debra Levy, as Managing Member of the LeFam Family Limited Partnership, has voting
power and dispositive control over these shares.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(5)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The 788,246 shares of common stock include (i) 288,246 shares of common stock, of
which 170,000 were obtained pursuant to the May Stock Offering, (ii) 100,000 shares of common stock issuable upon exercise of
warrants issued pursuant to the Notes Offering and (iii) 400,000 shares of common stock issuable upon conversion of the Notes
issued pursuant to the Notes Offering.</TD>
</TR></TABLE>

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<TD STYLE="width: 15pt; text-align: right">(6)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The 671,506 shares of common stock include (i) 171,506 shares of common stock, of
which 170,000 were obtained pursuant to the Stock Offerings, (ii) 100,000 shares of common stock issuable upon exercise of warrants
issued pursuant to the NotesO ffering and (ii) 400,000 shares of common stock issuable upon conversion of the Notes issued pursuant
to the Notes Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(7)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. Harry C. Mills Scio, as the Sole Member of the LeFam Family Limited Partnership,
has voting power and dispositive control over these shares.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(8)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The 349,973 shares of common stock include (i) 99,973 shares of common stock, of which
42,000 shares were obtained pursuant to the May Stock Offering, (ii) 200,000 shares of common stock issuable upon conversion of
the Notes issued pursuant to the Notes Offering and (iii) 50,000 shares of common stock issuable upon exercise of warrants issued
pursuant to the Notes Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(9)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The 817,070 shares of common stock include (i) 157,070 shares of common stock, of
which 41,667 were obtained pursuant to the May Stock Offering, (ii) 400,000 shares of common stock issuable upon conversion of
the Notes issued pursuant to the Notes Offering and (iii) 260,000 shares of common stock issuable upon exercise of warrants issued
pursuant to the Notes Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(10)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The 586,036 shares of common stock include (i) 91,036 shares of common stock, of which
33,333 shares were obtained pursuant to May Stock Offering, (ii)195,000 shares of common stock issuable upon exercise of warrants
issued pursuant to the Notes Offering and (iii) 300,000 shares of common stock issuable upon conversion of the Notes issued pursuant
to the Notes Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(11)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Both Mr. Andrew Feldman and Mrs. Jeri Feldman, as Trustees, have voting power and
dispositive control over these shares. The 404,370 shares of common stock include (i) 74,370 shares of common stock owned by The
Feldman Family Trust, of which 16,667 shares were obtained pursuant to the May Stock Offering, (ii) 130,000 shares of common stock
issuable upon exercise of warrants issued pursuant to the Notes Offering and (iii) 200,000 shares of common stock issuable upon
conversion of the Notes issued pursuant to the Notes Offering.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(12)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. James R. Campi is the brother of John P. Campi, the Company&rsquo;s Chief Executive
Officer.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(13)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Christina M. Belli and Leonard P. Belli are the daughter and son-in-law, respectively,
of John P. Campi, the Company&rsquo;s Chief Executive Officer.</TD>
</TR></TABLE>





<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B><U>Overview</U></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">You should read the following discussion and
analysis in conjunction with our financial statements and related notes contained elsewhere in this prospectus. This discussion
contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of a variety of factors, including those set forth under
Risk Factors.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Safety Quick Light LLC was incorporated in
the State of Florida on May 14, 2004. On November 6, 2012, the company&rsquo;s board of directors converted Safety Quick Light
LLC into Safety Quick Lighting &amp; Fans Corp. We are a company engaged in the business of developing proprietary technology
that enables a quick and safe installation by the use of a power plug for electrical fixtures, such as light fixtures and ceiling
fans, into ceiling and wall electrical junction boxes.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Safety Quick Light LLC began marketing the
SQL Technology in 2007 for installation of light fixtures and ceiling fans during manufacturing and as a kit for installing the
SQL Technology in existing light fixtures and ceiling fans. Our management team determined that it could improve its gross margins
if it were to market light fixtures and ceiling fans with its plug technology already installed on fixtures instead of marketing
the SQL Technology as an add-on device. To implement this New Business Model, during the first quarter of 2010, the Company&rsquo;s
management discontinued marketing the SQL Technology as an add-on device; however, existing orders were honored through 2010 and
2011, resulting in revenues and other financial activity in 2012, as reflected in our management&rsquo;s discussion below.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Company management then took the next step
in furtherance of its New Business Model and sought the endorsement of the SQL Technology from GE. During 2010 and 2011, GE tested
the SQL Technology and in June 2011, GE and SQL Lighting &amp; Fans, LLC, a subsidiary of the Company, entered into the License
Agreement, a trademark licensing agreement under which SQL Lighting &amp; Fans, LLC was licensed to use the GE monogram logo on
its devices and certain other trademarks on its ceiling fans and light fixtures through December 31, 2017. The License Agreement
requires the Company to pay a percent of revenue generated on our products using the GE monogram logo as a license fee, including
a minimum license fee payment during the term. The License Agreement was amended in April 2013 to extend its term through December
31, 2017 and to revise the required minimum license fees, and in July 2014 to remove minimum license fees for 2014. The License
Agreement was further amended in August 2014 to (i) establish the contract year as beginning on December 1 and ending on November
31 (a &ldquo;Contract Year&rdquo;), (ii) extend the term through November 30, 2018, (iii) provide that no royalties were due for
the period prior to 2013, (iv) provide that royalties of $400,000 were due for the period from January 1, 2013 through November
30, 2013, (v) set forth a new royalty calculation beginning December 1, 2013 and continuing through the term of the License Agreement
based on a tiered percentage of net sales in each Contract Year, and (vi) provide that the Company must pay to GE a royalty minimum
of $12,000,000 in the aggregate during the term of the License Agreement.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In furtherance of our New Business Model,
the Company has taken other steps, including the development of trade distribution channels with key retailers, corporate restructuring,
establishing and obtaining authorizations for our third party manufacturers to produce the SQL Technology, and raising the necessary
capital resources to fully implement its New Business Model. For additional information, see &ldquo;Our History and New Business
Model&rdquo; in the Prospectus Summary and the section titled &ldquo;Business&rdquo; in this prospectus.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">US Dollars are denoted herein by &ldquo;USD&rdquo;,
&ldquo;$&rdquo; and &ldquo;dollars&rdquo;.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><U>Results of Operations</U></B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B>Results of Operations for the Three-Months
Ended September 30, 2015 Compared to the Three-Months Ended September 30, 2014</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center">For the three months ended</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">September 30, 2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">$ Change</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">% Change</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; padding-left: 5.4pt">Revenue</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">262,897</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">262,897</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">100.0</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt">Cost of Sales</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(248,675</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(248,675</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Gross Profit / (Loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,222</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,222</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100.0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">General and Administrative Expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,220,844</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(481,922</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(738,922</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">153.3</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Loss from Operations</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,206,622</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(481,922</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(724,700</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">150.4</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Other Income / (Expense)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,873,802</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(593,776</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,280,026</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,394.5</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Net Loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(10,080,424</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,075,698</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(9,004,726</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">837.1</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">.</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Net Loss Per Share - basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.25</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.03</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.22</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(733.3</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)%</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Revenue</I></B></P>

<P STYLE="margin: 0; text-align: justify">We had recorded revenue of $262,897 for the
three-month period ended September 30, 2015, as compared to revenue of $0 for the three-month period ended September 30, 2014.
One of the Company&rsquo;s third party manufacturers received GE's approval in the fourth quarter of 2014, other third party manufactures
received GE&rsquo;s approval in the first and second quarters of 2015, and the Company began recording revenues under its New
Business Model in the first quarter of 2015. During the third quarter, on-line sales were initiated, creating a new channel for
the Company.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Cost of Sales</I></B></P>

<P STYLE="margin: 0; text-align: justify">We had a cost of sales of $248,675 for the
three-month period ended September 30, 2015, as compared to a cost of sales of $0 for the three-month period ended September 30,
2014. The increase in cost of sales was associated with sales of GE branded ceiling fans under the New Business Model.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Gross Profit</I></B></P>

<P STYLE="margin: 0; text-align: justify">We had gross profit of $14,222 for the three-month
period ended September 30, 2015, as compared to gross profit of $0 for the three-month period ended September 30, 2014. The gross
profit as a percent of sales was 5.4% and represents the initial orders to customers. When the previous quarters&rsquo; contractual
allowances for returns were excluded, gross margins for the quarter were 23.7%. These initial sales represented test orders, and
accordingly had lower gross margins. We believe there are opportunities to improve gross profit as a percent of sales on future
orders and with a sales record customers will reduce the allowances associated with potential defects or returns.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>General and Administrative Expenses
</I></B></P>

<P STYLE="margin: 0; text-align: justify">General and administrative expense increased
$738,922 during the three-month period ended September 30, 2015 to $1,220,844 from $481,922 for the three-month period ended September
30, 2014. The increases in the general and administrative expenses were primarily due to an increase in the amount recorded for
the amortization of the GE License Agreement of $615,000, sales commissions $23,000, consulting $51,000, marketing and travel
$30,000; offset by legal fees ($25,000) and payroll ($15,000).</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Loss from Operations</I></B></P>

<P STYLE="margin: 0; text-align: justify">Loss from operations represents the change
in general and administrative expenses offset by the gross profit on sales for the periods presented.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Other Income (Expense)</I></B></P>

<P STYLE="margin: 0; text-align: justify">Total other expenses increased $8,280,026
during the three-month period ended September 30, 2015 to $8,873,802 from $593,776 for the three-month period ended September
30, 2014. The increase in other expenses was due to $8,202,000 increase in non-cash derivative expense as a result of the value
of shares increasing from $0.25 to $0.60, based on the Company&rsquo;s recent private placement of common stock and the impact
on the Black Scholes calculation of the intrinsic value of the equity component.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Net Loss and Net Loss per Share</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company&rsquo;s net loss and net loss
per share for the three-month period ended September 30, 2015 was $(10,080,424), or ($0.25) per share, as compared to ($1,075,698)
or $(0.03) per share for the three-month period ended September 30, 2014. Given the reasons explained above, our loss increased
by ($9,004,726) for the three-months ended September 30, 2015.</P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B>Results of Operations for the Nine-Months
Ended September 30, 2015 Compared to the Nine-Months Ended September 30, 2014</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="11" STYLE="text-align: center">For the nine-months ended</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">September 30, 2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">$ Change</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">% Change</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; padding-left: 5.4pt">Revenue</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,482,035</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,482,035</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">100.0</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt">Cost of Sales</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,195,655</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,195,655</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Gross Profit / (Loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">286,380</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">286,380</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100.0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">General and Administrative Expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,741,198</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,419,989</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,321,209</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">163.5</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Loss from Operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,454,818</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,419,989</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,034,829</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">143.3</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Other Income / (Expense)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(9,631,670</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,969,754</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(7,661,916</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">389.0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Net Loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(13,086,489</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(3,389,743</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(9,696,746</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">286.1</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Net Loss Per Share - basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.34</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.10</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.24</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">240.0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Revenue</I></B></P>

<P STYLE="margin: 0; text-align: justify">We had recorded revenue of $2,482,035 for
the nine-month period ended September 30, 2015, as compared to revenue of $0 for the nine-month period ended September 30, 2014.
One of the Company&rsquo;s third party manufacturers received GE's approval in the fourth quarter of 2014, other third party manufactures
received GE&rsquo;s approval in the first and second quarters of 2015, and the Company began recording revenues under its New
Business Model in the first quarter of 2015. During the third quarter, on-line sales were initiated, creating a new channel for
the Company.</P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Cost of Sales</I></B></P>

<P STYLE="margin: 0; text-align: justify">We had a cost of sales of $2,195,655 for the
nine-month period ended September 30, 2015, as compared to a cost of sales of $0 for the nine-month period ended September 30,
2014. The increase in cost of sales was associated with the sales of GE branded ceiling fans under the New Business Model.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Gross Profit</I></B></P>

<P STYLE="margin: 0; text-align: justify">We had gross profit of $286,380 for the nine-month
period ended September 30, 2015, as compared to gross profit of $0 for the nine-month period ended September 30, 2014. The gross
profit as a percent of sales was 11.7% and represents the initial test orders to these customers, which normally have lower margins.
We believe there are opportunities to improve gross profit as a percent of sales on future orders.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>General and Administrative Expenses</I></B></P>

<P STYLE="margin: 0; text-align: justify">General and administrative expense increased
$2,321,209 during the nine-month period ended September 30, 2015 to $3,741,198 from $1,419,989 for the nine-month period ended
September 30, 2014.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The increases in the general and administrative
expenses were primarily due to the following:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$1,826,100 increase in the amount recorded for the amortization of the GE License
Agreement.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$238,800 increase on commissions associated with sales.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$168,000 increase in consulting expenses associated with activities as a public company.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$88,500 increase in sample products and production audits for manufacturing operations
in China.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$59,100 increase in travel associated with increased marketing and sales activity.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$47,000 increase in marketing expense associated with increased sales activity.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$45,000 increase in freight and inspection fees with increased sales activity.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Further, decreases in certain items of general
and administrative expenses were attributable to the following:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$217,700 decrease in legal fees due to activity associated with the prior years&rsquo;
secured convertible promissory notes.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$56,000 decrease in rent associated with new office space and sublet of previous space.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$38,000 decrease in salaries due to change in CEO compensation.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Loss from Operations</I></B></P>

<P STYLE="margin: 0; text-align: justify">Loss from operations represents the change
in general and administrative expenses partially offset by the gross profit on sales for the periods presented.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Other Income (Expense)</I></B></P>

<P STYLE="margin: 0; text-align: justify">Total other expenses increased $7,661,916
during the nine-month period ended September 30, 2015 to $9,631,670 from $1,969,754 for the nine-month period ended September
30, 2014. The increase was due to a $7,791,620 increase in non-cash derivative expense due to an increase in the values of the
equity component of the convertible notes from $0.25 to $0.60 per share based on the recent private placement of the Company&rsquo;s
common stock.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Net Loss and Net Loss per Share</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company&rsquo;s net loss and net loss
per share for the nine-month period ended September 30, 2015 was $13,086,489 or $0.34 per share as compared to $3,389,743 or $0.10
per share for the nine-month period ended September 30, 2014.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;<B>&nbsp;</B></P>

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<P STYLE="margin: 0; text-align: justify"><B></B></P>

<P STYLE="margin: 0; text-align: justify"><B>Results of Operations for the Year Ended December 31, 2014 compared
to the Year Ended December 31, 2013</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center">For the years ended</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, 2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, 2013</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">$ Change</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">% Change</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%">Revenue</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">Cost of sales</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Gross loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">General and administrative expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,799,696</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,401,435</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,398,261</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">242</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Loss from Operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,799,696</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,401,435</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,398,261</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">242</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Other Income / (Expense)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,005,053</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,206,333</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(798,720</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">66</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net Loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(6,804,749</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,607,768</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(4,196,981</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">161</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net loss per share - basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.20</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.08</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Revenue</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company had no revenue in 2014 or 2013
because it was transitioning to the New Business Model.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Cost of Sales</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company had no costs of sales in 2014
and 2013 due to the absence of revenue.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Gross Profit</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company did not have any sales or cost
of sales in 2014 and 2013. As a result there was no gross profit or loss.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>General and Administrative Expenses
</I></B></P>

<P STYLE="margin: 0; text-align: justify">General and administrative expense increased
$3,398,261 to $4,799,696 in 2014 from $1,401,435 in 2013.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The increases in the general and administrative
expenses were due to the following significant items:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$2,000,000 increase in the amount recorded for the GE License Agreement.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$381,000 in penalty payments to bondholders for failure to register the shares in
accordance with the Notes.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$334,000 increase in payroll expense, in 2013 some key employees were not paid for
most of the year.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$255,000 increase in consulting expenses associated with activities as a public company.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$122,000 increase in China operational expenses as the Company went through the GE
approval process.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$112,000 increase in accounting expenses driven by additional requirements for a public
company.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$90,000 increase in rent for facilities related to the opening of a corporate office.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$63,000 increase in marketing expenses as associated with the SQL Technology.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$48,000 increase in travel expenses due to trips to China and investor relation activities.</TD>
</TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Further, decreases in certain items of G&amp;A
expenses were attributable to the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$170,000 decrease in option expense, no additional options were issued in 2014.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">$60,000 decrease in management fees, reflecting a move to salaried positions.</TD>
</TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Loss from Operations</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Loss from operations represents the change
in general and administrative expenses since the Company had no gross profit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Other Income (Expense)</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Total other expenses increased approximately
$759,168 to $1,965,196 in 2014 from $1,206,000 in 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The increase in other expense is due to the
following significant items:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Increase of $1,900,000 in interest expense reflecting a full years interest associated
with the November 26, 2013 Notes and the addition of the May 8, 2014 and June 25, 2014 Notes.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decrease of $670,000 in derivative expense associated with the May 8, 2014 Notes.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Decrease of $100,000 in forgiveness of debt, associated with a 2013 transaction which
converted debt instruments to convertible notes.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Net Loss and Net Loss per Share</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company&rsquo;s net loss and net loss
per share in 2014 was approximately ($6,805,000) and $(0.20) per share, respectively, as compared to 2013 where net loss was approximately
($2,608,000) and ($0.08) per share, respectively. Inflation did not have a material impact on operations for the years ended December
31, 2014 and 2013.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><U>Interest Expense</U></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The following table
details the Company&rsquo;s interest expense components:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="text-align: center; border-bottom: Black 1pt solid">Year Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom; font-style: italic; font-weight: bold">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; text-align: left">Interest accrued on Notes outstanding.</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">147,191</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">40,026</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">4,329</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Interest on SBA loan with Signature Bank</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">21,893</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">27,274</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">31,371</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">TOTAL INTEREST EXPENSE &ndash; Notes Payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">169,084</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Amortization of Debt Issue Cost</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">142,865</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,986</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Amortization of Debt Discount</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,827,534</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">92,304</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,139,483</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">171,590</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">35,700</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><U>Liquidity and Capital Resources</U></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">To date, the Company has not generated sufficient
revenue to cover its operating costs and continues to operate with negative cash flow, which may require it to seek additional
capital to maintain current operations. In addition, if sufficient sales growth is achieved, the Company may be required to enter
into financing arrangements to fund its working capital needs. The Company currently has no such financing commitments in place.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">For the nine-months ended September 30, 2015,
cash flows used $2,865,936 for operations as compared with $1,338,612 used for the same period in 2014. The Company&rsquo;s $1,527,324
decrease in cash from operations was due to the $9,737,423 increased operating loss, $116,878 increase in accounts receivable,
$514,186 increase in inventory, and a $708,429 decrease in accounts payable and accrued expenses. These amounts were partially
offset in an increase in $7,791,621 amortization in debt discount and $1,826,807 increase in amortization of GE licenses.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">For the nine-months ended September 30, 2015,
cash flows used $31,355 for investing activities as compared with $190,095 used for the same period in 2014. The improvement was
primarily driven by a $180,895 acquisition of equipment in China during 2014, offset by additional $19,102 in patent costs incurred
in 2015.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">For the nine-months ended September 30, 2015,
cash flows provided $2,323,277 from financing activities after note payments as compared to $2,141,706 for the same period in
2014. The Company received proceeds of $1,970,832 from the issuance of shares of common stock during the nine-months ended September
30, 2015, and sold $2,270,100 in secured convertible notes during the same period in 2014.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">As a result of the above operating, investing
and financing activities, the Company used $667,473 in cash equivalents for the nine-months ended September 30, 2015 as compared
with providing $1,745,973 for the same period in the previous year.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company had a working capital deficit
of $15,493,415 as of September 30, 2015 as compared to $5,850,062 as of December 31, 2014. The change is attributable to an accounts
receivable and inventory offset by accounts payable, derivative liability and increase in convertible debt classified as current.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">During 2014, the Company executed a second
amendment to the License Agreement. Under the terms of this amendment, the Company agreed to pay GE a total of $12,000,000 by
November 2018 for the rights associated with the GE brand. The amount will be paid from a percentage of sales in accordance with
a schedule with the residual balance, if any, due in 2018. Given the Company&rsquo;s lack of sales history associated with the
License Agreement, the entire balance has been classified as long-term.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company acquired and is holding $514,186
in inventory on its balance sheet at September 30, 2015. This inventory is to support e-commerce activity on internet sales platforms
of their customers. The inventory is located with a third party logistics firm.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">A majority of the Company&rsquo;s sales do
not require the Company to take delivery of inventory. Production of the SQL Technology and fixtures will be originated upon receipt
of FOB (free on board) purchase contracts from customers. Upon the completion of each purchase contract, the finished products
will be transported from the manufacturer directly to the ports and loaded on vessels secured by the customer, upon which the
products become the property of the customer.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company&rsquo;s cash balance as of September
30, 2015 was $667,473. In light of the Company&rsquo;s projected working capital needs, it may need to seek additional capital,
which may dilute existing shareholders. There is no guarantee that the Company will be successful in raising additional capital
or be successful in the execution of its plans.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><U>Off-Balance Sheet Arrangements</U></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We do not have any off-balance sheet arrangements.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><U>Critical Accounting Policies and Estimates</U></B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">For a discussion of our accounting policies
and related items, please see the Notes to the Financial Statements, included in Part I, Item 1.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Estimates</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The preparation of financial statements in
conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect
the amounts reported in our financial statements and accompanying notes.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">Such estimates and assumptions impact both
assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful
lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share
based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates
of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the financial statements, which management considered in formulating its estimate could change in
the near term due to one or more future non-conforming events. Accordingly, actual results could differ significantly from estimates.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Recently Issued Accounting Pronouncements</I></B></P>

<P STYLE="margin: 0; text-align: justify">In April 2014, the FASB issued ASU No. 2014-08,
Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations
and Disclosures of Disposals of Components of an Entity. The amendments in this Update change the requirements for reporting discontinued
operations in Subtopic 205-20.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Under the new guidance, a discontinued operation
is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and &ldquo;represents
a strategic shift that has (or will have) a major effect on an entity&rsquo;s operations and financial results.&rdquo; The ASU
states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business,
(iii) a major equity method investment, or (iv) other major parts of an entity. Although &ldquo;major&rdquo; is not defined, the
standard provides examples of when a disposal qualifies as a discontinued operation.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The ASU also requires additional disclosures
about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued
operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually
significant component of an entity that does not qualify for discontinued operations presentation in the financial statements.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The ASU is effective for public business entities
for annual periods beginning on or after December 15, 2014, and interim periods within those years.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In May 2014, the FASB and International Accounting Standards Board issued a
converged final standard on the recognition of revenue from contracts with customers. This updated guidance provides a
framework for addressing revenue recognition issues and replaces almost all existing revenue recognition guidance in current
U.S. generally accepted accounting principles. The core principle of the new standard is for companies to recognize revenue
to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the Company
expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures
about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for
multiple-element arrangements. This guidance is effective for interim and annual periods beginning after December 15, 2017.
Management has not yet evaluated the future impact of this guidance on the Company&rsquo;s financial position, results of
operations or cash flows.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In September 2014, the FASB issued ASU 2014-15,
<I>Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern</I>. This ASU describes how an entity
should assess its ability to meet obligations and sets disclosure requirements for how this information should be disclosed in
the financial statements. The standard provides accounting guidance that will be used with existing auditing standards. The amendments
in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter.
Early application is permitted. The adoption of this guidance will be examined for the year ended December 31, 2016, and if applicable
at that time, will require management to make the appropriate disclosures.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Other pronouncements issued by the FASB or
other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be
significant to the Company&rsquo;s financial position, results of operations or cash flows.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B>Critical Accounting Policies and Estimates</B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Accounts Receivable and Allowance for
Doubtful Accounts</I></B></P>

<P STYLE="margin: 0; text-align: justify">Accounts receivable are recorded at the invoiced
amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but
mitigates the associated risks by performing credit checks and actively pursuing past due accounts.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company recognizes an allowance for losses
on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis
of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific
identifiable customer accounts considered at risk or uncollectible.</P>

<P STYLE="margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Inventory</I></B></P>

<P STYLE="margin: 0; text-align: justify">Inventory will consist of finished goods purchased,
which are valued at the lower of cost or market value, with cost being determined on the first-in, first-out method.&nbsp;&nbsp;The
Company will periodically review historical sales activity to determine potentially obsolete items and also evaluates the impact
of any anticipated changes in future demand.&nbsp;&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Valuation of Long-Lived Assets and Identifiable
Intangible Assets</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company reviews for impairment of long-lived
assets and certain identifiable intangible assets whenever events or changes in circumstances indicate that the carrying amount
of any asset may not be recoverable. In the event of impairment, the asset is written down to its fair market value.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Property and Equipment</I></B></P>

<P STYLE="margin: 0; text-align: justify">Property and equipment is stated at cost,
less accumulated depreciation and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable.</P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="margin: 0; text-align: justify">Depreciation of property and equipment is
provided utilizing the straight-line method over the estimated useful lives, ranging from 5-7 years of the respective assets.
Expenditures for maintenance and repairs are charged to expense as incurred.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Upon sale or retirement of property and equipment,
the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements
of operations.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Intangible Asset - Patent</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company developed a patent for an installation
device used in light fixtures and ceiling fans. Costs incurred for submitting the applications to the United States Patent and
Trademark Office for these patents have been capitalized. Patent costs are being amortized using the straight-line method over
the related 15 year lives. The Company begins amortizing patent costs once a filing receipt is received stating the patent serial
number and filing date from the United States Patent and Trademark Office.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company incurs certain legal and related
costs in connection with patent applications. The Company capitalizes such costs to be amortized over the expected life of the
patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available
to the Company. The Company also capitalizes legal costs incurred in the defense of the Company&rsquo;s patents when it is believed
that the future economic benefit of the patent will be maintained or increased and a successful defense is probable. Capitalized
patent defense costs are amortized over the remaining expected life of the related patent. The Company&rsquo;s assessment of future
economic benefit or a successful defense of its patents involves considerable management judgment, and an unfavorable outcome
of litigation could result in a material impairment charge up to the carrying value of these assets.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Fair Value of Financial Instruments</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company measures assets and liabilities
at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents
the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction
between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an
asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for</P>

<P STYLE="margin: 0; text-align: justify">measuring fair value on either a recurring
or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The following are the hierarchical levels
of inputs to measure fair value:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Level 1 &ndash; Observable inputs that reflect quoted market prices in active markets
for identical assets or liabilities.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Level 2 &ndash; Inputs reflect quoted prices for identical assets or liabilities in
markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices
that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market
data by correlation or other means.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Level 3 &ndash; Unobservable inputs reflecting the Company&rsquo;s assumptions incorporated
in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant
assumptions that are reasonably available.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The carrying amounts of the Company&rsquo;s
financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable &amp; accrued expenses,
certain notes payable and notes payable &ndash; related party, approximate their fair values because of the short maturity of
these instruments.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company accounts for its derivative liabilities,
at fair value, on a recurring basis under Level 3.</P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Embedded Conversion Features</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company evaluates embedded conversion
features within convertible debt under ASC 815 &ldquo;Derivatives and Hedging&rdquo; to determine whether the embedded conversion
feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair
value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated
under ASC 470-20 &ldquo;Debt with Conversion and Other Options&rdquo; for consideration of any beneficial conversion features.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of it financial instruments, including
stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.
For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at
its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to
income.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">For option-based simple derivative financial
instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent
valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities
or as equity, is re-assessed at the end of each reporting period.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Stock-Based Compensation - Employees</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company accounts for its stock based compensation
in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles
of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph
718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received
for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value
of the equity instrument issued, whichever is more reliably measurable.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">The measurement date used to determine the
fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which
it is probable that performance will occur.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">If the Company is a newly formed corporation
or shares of the Company are thinly traded, the use of share prices established in the Company&rsquo;s most recent private placement
memorandum (based on sales to third parties) (&ldquo;PPM&rdquo;), or weekly or monthly price observations would generally be more
appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between
the bid and asked quotes and lack of consistent trading in the market.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The fair value of share options and similar
instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions
for inputs are as follows:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Expected term of share options and similar instruments: The expected life of options
and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to Paragraph
718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments
represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of
the contractual term of the instruments and employees&rsquo; expected exercise and post-vesting employment termination behavior
into the fair value (or calculated value) of the instruments. Pursuant to paragraph 718-10-S99-1, it may be appropriate to use
the simplified method, i.e., expected term = ((vesting term + original contractual term) / 2), if (i) A company does not have
sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period
of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants
or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable
basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business
such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term. The Company
uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient
historical exercise data to provide a reasonable basis upon which to estimate expected term.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Expected volatility of the entity&rsquo;s shares and the method used to estimate it.
Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall
disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate
industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical
volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected
contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded
the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as
the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between
the bid and asked quotes and lack of consistent trading in the market.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Expected annual rate of quarterly dividends. An entity that uses a method that employs
different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average
expected dividends. The expected dividend yield is based on the Company&rsquo;s current dividend yield as the best estimate of
projected dividend yield for periods within the expected term of the share options and similar instruments.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Risk-free rate(s). An entity that uses a method that employs different risk-free rates
shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect
at the time of grant for periods within the expected term of the share options and similar instruments.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Generally, all forms of share-based payments,
including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value
on the awards&rsquo; grant date, based on estimated number of awards that are ultimately expected to vest.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The expense resulting from share-based payments
is recorded in general and administrative expense in the statements of operations.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Equity Instruments Issued to Parties
Other Than Employees for Acquiring Goods or Services</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company accounts for equity instruments
issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting
Standards Codification (&ldquo;Sub-topic 505-50&rdquo;).</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Pursuant to ASC Section 505-50-30, all transactions
in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the
fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the
performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation
or shares of the Company are thinly traded the use of share prices established in the Company&rsquo;s most recent private placement
memorandum (&ldquo;PPM&rdquo;), or weekly or monthly price observations would generally be more appropriate than the use of daily
price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack
of consistent trading in the market.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The fair value of share options and similar
instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions
for inputs are as follows:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i)
of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period
of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of
the instruments and holder&rsquo;s expected exercise behavior into the fair value (or calculated value) of the instruments. The
Company uses historical data to estimate holder&rsquo;s expected exercise behavior. If the Company is a newly formed corporation
or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected
term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable
basis upon which to estimate expected term.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Expected volatility of the entity&rsquo;s shares and the method used to estimate it.
Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall
disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate
industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical
volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected
contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded
the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as
the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between
the bid and asked quotes and lack of consistent trading in the market.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Expected annual rate of quarterly dividends. An entity that uses a method that employs
different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average
expected dividends. The expected dividend yield is based on the Company&rsquo;s current dividend yield as the best estimate of
projected dividend yield for periods within the expected term of the share options and similar instruments.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Risk-free rate(s). An entity that uses a method that employs different risk-free rates
shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect
at the time of grant for periods within the expected term of the share options and similar instruments.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">Pursuant to ASC paragraph 505-50-25-7, if
fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods
or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination
of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor
shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding
cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements
of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may
conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity
instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific
performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity
by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the
balance sheet display of the asset.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">This guidance is limited to transactions in which equity instruments are transferred
to other than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement
date for transactions that are within the scope of this Subtopic.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9,
an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified
period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance
conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity
had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity
instruments. A recognized asset, expense, or sales discount shall not be reversed if a share option and similar instrument that
the counterparty has the right to exercise expires unexercised.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Pursuant to ASC paragraph 505-50-30-S99-1,
if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity
instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are
not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should
be recorded.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Income Tax Provision</I></B></P>

<P STYLE="margin: 0; text-align: justify">From the inception of the Company and through
November 6, 2012, the Company was taxed as a pass-through entity (a limited liability company) under the Internal Revenue Code
and was not subject to federal and state income taxes; accordingly, no provision had been made.</P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="margin: 0; text-align: justify">The financial statements reflect the Company&rsquo;s
transactions without adjustment, if any, required for income tax purposes for the period from November 7, 2012 to December 31,
2012. The net loss generated by the Company for the period January 1, 2012 to November 6, 2012 has been excluded from the computation
of income taxes.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company accounts for income taxes under
Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this
method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets
and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax
assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will
not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations in the period that includes the
enactment date.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">The Company adopted section 740-10-25 of the
FASB Accounting Standards Codification (&ldquo;Section 740-10-25&rdquo;). Section 740-10-25 addresses the determination of whether
tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25,
the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position
will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized
in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty
(50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition,
classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The estimated future tax effects of temporary
differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well
as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded
on its consolidated balance sheets and provides valuation allowances as management deems necessary.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Management makes judgments as to the interpretation
of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition,
the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management&rsquo;s
opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies
from estimates, additional allowances or reversals of reserves may be necessary.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company&rsquo;s tax returns are subject
to examination by the federal and state tax authorities for the years ended 2012 through 2014.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Uncertain Tax Positions</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company did not take any uncertain tax
positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for
the reporting periods ended December 31, 2014, 2013 and 2012.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Related Parties</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Company follows subtopic 850-10 of the
FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Pursuant to Section 850-10-20 the related
parties include (a) affiliates of the Company; (b) Entities for which investments in their equity securities would be required,
absent the election of the fair value option under the Fair Value Option Subsection of Section 825&ndash;10&ndash;15, to be accounted
for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing
trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the
Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management
or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its
own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting
parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent
that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The consolidated financial statements shall
include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other
similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of
consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature
of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal
amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary
to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for
each of the periods for which income statements are presented and the effects of any change in the method of establishing the
terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet
presented and, if not otherwise apparent, the terms and manner of settlement.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><U>Related Party Transactions</U></B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">We are currently party to a consulting agreement
with Mr. Rani Kohen, Chairman of the Company&rsquo;s Board, pursuant to which we are required to pay cash compensation in the
amount of $150,000 per year.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>BUSINESS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Overview</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B></B></P>

<P STYLE="margin: 0; text-align: justify">We are a company engaged in the business of
developing proprietary technology that enables a quick and safe installation by the use of a power plug for electrical fixtures,
such as light fixtures and ceiling fans, into ceiling and wall electrical junction boxes.&nbsp; As of January 8, 2016, we have
three issued U.S. Patents relating to our technology. We also have patents in China (two issued patents) and India (one issued
patent and one pending patent application) which protect different aspects of the same SQL Technology as the three issued U.S.
patents. The Company sought intellectual property protection of its SQL Technology in China due to its current manufacturing operations
and prospective sales in China&rsquo;s market, and sought protection in India in anticipation of future growth into India&rsquo;s
developing market, both with respect to the sales of SQL Technology and potential operations of the Company. The intellectual property
represented by these patents is a fixable socket and a revolving plug for conducting electric power and supporting an electrical
appliance attached to a wall or ceiling. The socket is comprised of a non-conductive body that houses conductive rings connectable
to an electric power supply through terminals in its side exterior. The plug, also comprised of a non-conductive body that houses
corresponding conductive rings, attaches to the socket via a male post and is capable of feeding electric power to an appliance.
The plug also includes a second structural element allowing it to revolve with a releasable latching which, when engaged, provides
a retention force between the socket and the plug to prevent disengagement. The socket and plug can be detached by releasing the
latch, disengaging the electric power from the plug. The socket is designed to replace the support bar incorporated in electric
junction boxes, and the plug can be installed in light fixtures, ceiling fans and wall sconce fixtures.<FONT STYLE="background-color: white">
The combined socket and plug technology is referred to throughout this prospectus as &ldquo;the SQL Technology&rdquo;.</FONT></P>



<P STYLE="margin: 0; text-align: justify"><B></B></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white"><B>Products</B></FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white">We manufacture
and sell ceiling fans and lighting fixtures branded with General Electric logo and manufactured under their strict guidance. Our
ceiling fans and lighting fixtures offer unique designs, and are manufactured with and without the SQL Technology.</FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white">The
SQL Technology is an attachment fitting plug and mounting receptacle used to install lighting fixtures and ceiling fans. The SQL
Technology replaces the traditional mounting bar found in existing electrical junction boxes, converting the mounting system into
a weight bearing plug with no exposed wires. Our technology could transform the lighting fixture and ceiling fan industry. Using
the SQL Technology, anyone can safely install lighting fixtures and ceiling fans in minutes. Professional electricians as well
as &ldquo;Do it Yourself&rdquo; installers will benefit from our technology. The SQL Technology is Underwriters Laboratories (UL)
listed for USA and Canada and is licensed by GE. </FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white">Our
SQL Technology is comprised of two parts: a &lsquo;female&rsquo; socket receptacle that is secured to existing electrical junction
boxes, into which electrical and ground wires are simply inserted and secured into terminals on the device, and a &lsquo;male&rsquo;
plug fitting that is preinstalled on the lighting fixture or fan. The receptacle is easily attached to the junction box, and any
lighting fixture or fan with the SQL Technology can be literally installed in seconds. Our manufacturing plan calls for the SQL
Technology to be pre-installed in all types of lighting fixtures, including holiday themed lighting, and ceiling fans. </FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white">We have
been working with several well established factories producing ceiling fans and lights in China. Many of these factories have
been in business for over 20 years and follow strict human rights and sustainability protocols.</FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>

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<P STYLE="margin: 0; text-align: justify"><FONT STYLE="background-color: white"></FONT></P>

<P STYLE="margin: 0; text-align: justify"><B>Our History and New Business Model</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Safety Quick Light LLC began marketing the SQL Technology in 2007 for installation of light fixtures and ceiling
fans during manufacturing and as a kit for installing the SQL Technology in existing light fixtures and ceiling fans. The Company
sold 800,000 units of the SQL Technology OEM (&ldquo;Original Equipment Manufacturer&rdquo;) to lighting manufacturers and retailers
who installed the <FONT STYLE="background-color: white">socket and plug technology</FONT> into their lighting fixtures for sale
at retail stores. The Company also sold, directly to the retailers, 100,000 ceiling fans with the SQL Technology embedded into
the product. Our management team determined that it could improve its gross margins if it were to market light fixtures and ceiling
fans with and without the SQL Technology already installed on fixtures (the &ldquo;New Business Model&rdquo;), instead of marketing
the SQL Technology as an add-on device. During the first quarter of 2010, the Company&rsquo;s management took the first of several
steps toward implementing a New Business Model and discontinued marketing the SQL Technology as an add-on device; however, existing
orders were honored through 2010 and 2011, resulting in revenues through 2012.&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Company management then took the next step in furtherance of its New Business
Model and sought the endorsement of the SQL Technology from General Electric. During 2010 and 2011, GE tested the SQL
Technology and in June 2011, GE and SQL Lighting &amp; Fans, LLC, a subsidiary of the Company, entered into the License
Agreement, a trademark licensing agreement under which SQL Lighting &amp; Fans, LLC was licensed to use the GE monogram logo
on its devices and certain other trademarks on its ceiling fans and light fixtures through December 31, 2017.&nbsp; The
License Agreement requires the Company to pay a percent of revenue generated on our products using the GE monogram logo as a
license fee, including a minimum license fee payment during the term. The License Agreement was amended in April 2013 to
extend its term through December 31, 2017 and to revise the required minimum license fees, and in July 2014 to remove minimum
license fees for 2014. The License Agreement was further amended in August 2014 to (i) establish the Contract Year as
beginning on December 1 and ending on November 31, (ii) extend the term through November 30, 2018, (iii) provide that no
royalties were due for the period prior to 2013, (iv) provide that royalties of $400,000 were due for the period from January
1, 2013 through November 30, 2013, and (v) set forth a new royalty calculation beginning December 1, 2013 and continuing
through the term of the License Agreement. The current License Agreement provides that royalties due to GE will be tiered,
based on a declining percentage of net sales in each Contract Year, paid quarterly, as follows:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD COLSPAN="3" STYLE="text-align: justify; border-bottom: Black 1pt solid">Net Sales in Contract Year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Royalty as a Percentage of Net Sales</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 43%; text-align: left; vertical-align: top">0 - $50,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 43%; text-align: center; vertical-align: bottom">7%</TD><TD STYLE="width: 1%; text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: left; vertical-align: top">50,000,001 - $100,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">6%</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: left; vertical-align: top">100,000,001+</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">5%</TD><TD STYLE="text-align: left"></TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White; font-weight: bold">
    <TD STYLE="width: 45%; text-align: justify; border-bottom: Black 1pt solid; padding-left: 5.4pt">Net Sales Made</TD><TD STYLE="width: 10%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 45%; text-align: center; border-bottom: Black 1pt solid; padding-left: 5.4pt">Quarterly Payment Due Date</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-left: 5.4pt">December 1 through February 28/29</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">26-Mar</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 5.4pt">March 1 through May 30</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">26-Jun</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-left: 5.4pt">June 1 through August 31</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">26-Sep</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 5.4pt">September 1 through November 30</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">26-Dec</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The Company is obligated to pay to GE a royalty
minimum of $12,000,000 in the aggregate during the term of the License Agreement. If, at the end of the term of the License Agreement,
the total of all royalty payments paid pursuant to the License Agreement does not total $12,000,000, the Company must pay to GE
the difference between $12,000,000 and the amount of royalties actually paid to GE through the end of the term of the License
Agreement.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The License Agreement enables the Company
to market ceiling fans and light fixtures with the SQL Technology using the GE logo. The License Agreement imposes certain manufacturing
and quality control conditions that we must maintain. In addition to marketing ceiling fans and light fixtures under the GE logo
and trademarks, the Company has the right to offer private label ceiling fans and light fixtures with its technology installed
to retailers that market private label products.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">In furtherance of its New Business Model, the Company sought to establish
trade distribution channels with key retailers. In July 2012, the Company entered into a sales and marketing agreement with
Design Solutions International, Inc., a privately held, lighting industry design and marketing firm (the
&ldquo;DSI Agreement&rdquo;). Founded in 2001, DSI is headquartered in Fort Lauderdale, Florida and maintains a production
quality control and development office in the Guangdong province of China. DSI was founded in 2001 by two lighting
professionals with over 25-years lighting product sales experience each with Catalina Lighting, Zellers, Dana Lighting and
Lite Factory, among others. DSI sells light fixtures to large retail organization such as Walmart, Costco, The Home Depot,
BJ&rsquo;s Wholesale Club, Sam&rsquo;s Club and others throughout North America. During the second half of 2015, DSI was
acquired by NBG Home, a leading global designer, manufacturer and marketer of home d&eacute;cor products&nbsp;owned by
Kohlberg &amp; Company. The DSI Agreement remains in effect. Under the terms of the DSI Agreement, DSI will serve as the
Company&rsquo;s exclusive sales representative for all its products and goods in the United States and Canada. For its
services, DSI will receive a commission based on net sales. In addition to DSI&rsquo;s sales and marketing support, the Company&rsquo;s products will also be sold through
GE&rsquo;s lighting sales group as a condition of the License Agreement.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">On November 6, 2012, Safety Quick Light LLC
was converted into Safety Quick Lighting &amp; Fans Corp. at which time all tangible and intangible assets and liabilities were
transferred to the surviving company. In January 2014, the Company moved into its headquarters in Atlanta, Georgia and in November
2014 it relocated to its current headquarters in Alpharetta, Georgia. The Company&rsquo;s operations currently consist of a corporate
management team operating in the Alpharetta, Georgia offices.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company&rsquo;s New Business Model entails
the use of third party manufactures to produce the SQL Technology and the ceiling fans and light fixtures in which SQL Technology
is imbedded. The manufacturers currently used by the Company are located in Guangdong province of China and, as required by the
Licensing Agreement with GE, must be approved by GE to ensure quality standards are met. To further ensure that quality specifications
are maintained, the Company maintains an office in the Guangdong province staffed with GE trained auditors who will regularly
inspect its products produced by the third party manufacturer.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In November 2013 and in May and June 2014,
the Company obtained the capital resources necessary to implement its New Business Model through the Notes Offering. In June,
August, November and December 2015, the Company obtained additional capital resources necessary to implement its New Business
Model through the Stock Offerings. See &ldquo;The Stock Offerings&rdquo; beginning on page 19 of this prospectus.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">During 2014, the Company experienced unanticipated delays in the facility approval
process noted above, which delayed sample availability and thus, sales activity. Accordingly, the Company has enhanced its
New Business Model to include an additional, parallel revenue path. This enhancement provides for the design and manufacture
of a smaller, less customized, and more unique product line which incorporates the GE branding and the SQL Technology. The
Company believes this shorter product line will have greater trade and consumer appeal in a significantly less competitive
market segment. Further, the shorter product line will help the Company build awareness of the GE market entry and the SQL
Technology.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Through 2014, we worked on the final steps
to implement our New Business Model. The Company has obtained the necessary qualification and approval of the third party manufacturer&rsquo;s
facilities. The Company and DSI have also been actively presenting the Company&rsquo;s product lines to key retailers. The Company
continues to develop renderings and samples of new ceiling fan and light fixture designs with the SQL Technology embedded in the
product for sale to retailers. The new items are being presented to the retailers as GE-branded fans and lighting, and the retailers
are currently reviewing these new fan designs for inclusion into their upcoming programs. The Company is actively marketing and
selling the SQL Technology via its New Business Model.</P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">After our year ended December 31, 2014, we
shipped our first products and recorded our first sales under the New Business Model. The sales were to a large retail operation
and consisted of ceiling fans with the GE brand. These fans did not contain the SQL Technology, however it represented a significant
milestone in the development of customer relationships with large retailers.</P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">In February 2015, we received an updated Underwriters
Laboratories (UL) Listing for the SQL Technology. This listing will expand the type of products that we will be able to use with
the SQL Technology. This listing expanded the voltage and amperage that our product is rated for and will allow for additional
fixtures, such as heating elements to be incorporated into our ceiling fans.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In order to further expand our sales and marketing campaigns, on June 1, 2015 we entered into a two-year Consulting
Agreement with Mark J. Wells for the promotion of our products and for other sales consulting services (the &ldquo;Wells Agreement&rdquo;).
Subject to other customary terms, the Wells Agreement provides for the payment of incentive compensation equal to 3.0% of gross
revenue, defined as gross sales less returns and discounts on specified sales channels, between $0 and $20,000,00, and 1.5% of
gross revenue over $20,000,000. Compensation will be paid quarterly in shares of the Company&rsquo;s common stock at a discount
of 20% of then-current market price. Mr. Wells will receive &ldquo;bonus shares&rdquo; annually based on achieving specified gross
revenue targets. He will also receive 100,000 shares to vest on the one-year anniversary of the Wells Agreement, and options to
purchase up to 500,000 shares of the Company&rsquo;s common stock upon achieving a gross revenue hurdle of $5,000,000, at a price
per share equal to the market price of the Company&rsquo;s common stock on the date such gross revenue hurdle is achieved. No gross
revenue was recorded applicable to the Wells Agreement during 2015.</P>



<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Intellectual Property</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We have developed a proprietary technology,
the SQL Technology, that we believe provides us with a competitive advantage in the lighting and ceiling fan fixture marketplace.
We protect the SQL Technology through the use of an intellectual property protection strategy that is focused on patent protection.
As of January 8, 2016, we have three issued U.S. patents relating to our quick connect device for electrical fixtures. We also
have patents in China (two issued patents) and India (one issued patent and one pending patent application), which protect different
aspects of the same SQL Technology as the three issued U.S. patents. The Company sought intellectual property protection of its
SQL Technology in China due to its current manufacturing operations and prospective sales in China&rsquo;s market, and sought
protection in India in anticipation of future growth into India&rsquo;s developing market, both with respect to the sales of SQL
Technology and potential operations of the Company. We intend to maintain this intellectual property protection for the SQL Technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The issued patents are directed to various
aspects of our plug and socket combination that comprise the quick connect device. The issued patents provide patent protection
for our quick connect device, regardless of the electrical fixture used with the quick connect device. As further innovations
are developed, we intend to seek additional patent protection to enhance our competitive advantage.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Competition</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">We currently face
competition from traditional lighting technologies. There are numerous traditional light manufacturing companies, worldwide, many
of which are significantly larger than us. Traditional lighting technologies have the advantage of a long history of market acceptance
and developed relationships with retailers and distributors. We will actively seek to educate our target markets as to the advantages
of our technology compared to traditional installation methods and believe the achievement of this objective is critical to our
future. Although our technology is proprietary and patent protected, there can be no assurance that a large conventional lighting
company will not invent a competing technology that offers similar installation efficiencies and enter the market and utilize
its resources to capture significant market share and adversely affect our operating results.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We believe our products with the SQL Technology
can effectively compete against traditional lighting in the areas of installation, maintenance and safety. The SQL Technology
offers the advantage of ease of installation and replacement. This feature is superior to other lighting systems, which can require
the service of professional electricians to install and remove. Once SQL&rsquo;s socket is correctly installed in a ceiling or
wall electrical junction box, there is no exposure to live electrical wires resulting in an additional advantage in the area of
safety. Furthermore, the installation of our socket, which weighs approximately four (4) ounces, requires significantly less work
and exertion compared to traditional ceiling light or fan fixtures, which ordinarily weigh in excess of ten (10) pounds and can
weigh hundreds of pounds. There can be no assurance, however, that the current competitors directly involved in this industry
or a new competitor will not develop processes or technology which will allow them to decrease their costs, and consequently,
erode our price advantage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">The primary vendors of ceiling lighting and fans include the following:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font-size: 10pt; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD COLSPAN="2"><U>Competitors for Lighting</U></TD>
    <TD COLSPAN="2"><U>Competitors for Fans</U></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 42%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 42%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Progress Lighting </TD>
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD> Litex Ceiling Fans </TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Minka Lavery </TD>
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD> Hunter Fans</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Quiozel </TD>
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Lowes Harbor Breeze </TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Bel-Air Lighting </TD>
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Home Depot Hampton Bay Brand </TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Lowes Portfolio Brand</TD>
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD> Casablanca&nbsp;Fans </TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Home Depot Hampton Bay Brand </TD>
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Minka-Aire Fans </TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Catalina Lighting</TD>
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD> Monte Carlo&nbsp;Fans </TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD> Eurofase </TD>
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD> Kichler Fans </TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Eglo</TD>
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Westinghouse</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Generation Brands</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD>Murray Feiss </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; vertical-align: middle">&nbsp;&bull;</TD>
    <TD> Kichler</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify">&nbsp;<B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B></B></P>

<P STYLE="margin: 0; text-align: justify"><B>Competitive Position</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">There is significant
competition in the ceiling lighting and fan market place, though we believe we have a competitive advantage due to the strength
of our SQL Technology. This competitive advantage extends to customers both in the residential as well as the commercial markets.
The SQL Technology is patented or trademarked in the United States of America, Canada, Mexico, Hong Kong, China, and Australia.
The Company faces competitive forces from traditional approaches towards ceiling lighting and fans installations. While it is
unclear whether SQL&rsquo;s unique technology will gain significant market penetration, the Company believes that its safety and
installation efficiency features will gain market acceptance since it significantly reduces the time necessary to install such
fixtures and, after a one-time installation of the socket component, eliminates further exposure to electrical wires when used
in conjunction with fixtures in which the plug is installed.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">To further bolster
the Company&rsquo;s competitive position, it has engaged the support of DSI, a lighting design and marketing firm whose existing
customer base includes Walmart, Costco, The Home Depot, BJ&rsquo;s Wholesale Club, Sam&rsquo;s Club and others major retailers
throughout North America. DSI&rsquo;s management boasts an average of 25-years&rsquo; experience in the lighting industry with
leading manufacturers such as Catalina Lighting, Zellers, Dana Lighting and Lite Factory among others. DSI provides sales and
marketing support in North America and sourcing and production management support in China. In addition to DSI&rsquo;s sales and
marketing support, the Company&rsquo;s products will be sold through GE&rsquo;s lighting sales group as a condition of the Licensing
Agreement. The Company believes the combination of DSI and GE sales support will enable it to effectively competitive in the ceiling
lighting and fan market. </P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Seasonality</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Retailers purchase
ceiling fans for early spring and summer sales. As a result, we will sell more of that product in the October through February
time period. Our lighting products do not lend themselves to seasonal purchases. During periods of economic expansion or contraction
our sales by quarter may vary significantly from this seasonal pattern.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Government and Environmental Regulation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Our facilities and operations are subject
to federal, state and local laws and regulations relating to environmental protection and human health and safety. Some of these
laws and regulations may impose strict, joint and several liabilities on certain persons for the cost of investigation or remediation
of contaminated properties. These persons may include former, current or future owners or operators of properties and persons
who arranged for the disposal of hazardous substances. Our leased real property may give rise to such investigation, remediation
and monitoring liabilities under environmental laws. In addition, anyone disposing of certain products we distribute, such fluorescent
lighting, must comply with environmental laws that regulate certain materials in these products.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">We believe that we
are in compliance, in all material respects, with applicable environmental laws. As a result, we do not anticipate making significant
capital expenditures for environmental control matters either in the current year or in the near future.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Employees</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">As of January 8, 2016, we had four full time employees in the United States of
America and  four full time employees in the Peoples Republic of China. We have not experienced any work stoppages and
consider our relations with our employees to be good.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In addition to these salaried employees, the
Company&rsquo;s non-executive Chairman of our Board, Rani Kohen, serves as a paid consultant to the Company on operational activities.
Mr. Kohen is the founder of Safety Quick Lighting &amp; Fans Corp. and previously served as our Chief Executive Officer.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Our Corporate Information</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our principal executive offices are located
at 4400 North Point Parkway, Suite 154, Alpharetta, Georgia, 30022 and our telephone number is (770) 754-4711. Our web address
is http://www.safetyquicklight.com.</P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B>Available Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Copies of our Annual Reports on&nbsp;Form&nbsp;10-K,&nbsp;Quarterly
Reports on&nbsp;Form&nbsp;10-Q,&nbsp;Current Reports on&nbsp;Form&nbsp;8-K&nbsp;and other documents that we will file with or
furnish to the SEC will be available free of charge&nbsp;by sending a written request to our Chief Executive Officer at our corporate
headquarters.&nbsp;&nbsp;Additionally, the documents we file with the SEC is or will be available free of charge at the SEC&rsquo;s
Public Reference Room at 100&nbsp;F&nbsp;Street, NE, Washington D.C. 20549. Other information on the operation of the Public Reference
Room is or will be available by calling the SEC at (800)&nbsp;SEC-0330.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>PROPERTIES</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Our corporate offices are located at 4400
North Point Parkway, Suite 154, Alpharetta, Georgia. The monthly rent related to our lease is currently $1,970.91 per month,,
subject to increases in subsequent periods. The Company had previously rented office space located at One Buckhead Plaza, 3060
Peachtree Road, Suite 390, Atlanta, Georgia 30305. The Company is currently subleasing this space through March 31, 2017. We do
not own any property or land. We believe that our facilities are adequate for our current needs and that, if required, we will
be able to locate suitable new office space and obtain a suitable replacement for our executive and administrative headquarters</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>LITIGATION</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We are not party, nor is our property subject,
to any material pending legal proceedings.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>MANAGEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following is a list of our directors and
executive officers.&nbsp;&nbsp;All directors serve one-year terms or until each of their successors are duly qualified and elected.&nbsp;&nbsp;The
officers are elected by our Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD STYLE="border-bottom: Black 1pt solid">Name</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Age</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">Position</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 28%; text-align: left">Mr. John P. Campi</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: center; vertical-align: bottom">71</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 50%; text-align: left">Chief Executive Officer</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Mr. Rani Kohen</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Director, Chairman</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Mr. Phillips Peter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">83</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>Director</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Mr. Thomas Ridge</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">70</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>Director</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Mr. Dov Shiff</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">68</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>Director</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Mr. Leonard J. Sokolow</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">59</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>Director</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><I>John P. Campi</I> has served as the Company&rsquo;s
Chief Executive Officer since November 2014. Mr. Campi founded Genesis Management, LLC in 2009, and retired in 2014 upon accepting
the role of Chief Executive Officer. Mr. Campi has extensive experience in the field of cost management, is recognized as a Founder
of the strategic cost-management discipline known as Activity-Based Cost Management, and is generally recognized as a national
leader in the field of supply chain management. From December 2007 to December 2008, Mr. Campi served as the Chief Procurement
Officer and an Executive Vice President for Chrysler LLC, where he was responsible for all worldwide purchasing and supplier quality
activities. From September 2003 to January 2007, Mr. Campi served as the Senior Vice President of Sourcing and Vendor Management
for The Home Depot, where he led the drive for standardization and optimization of The Home Depot Global Supply Chain. From April
2002 to September 2003, Mr. Campi served as the Chief Procurement Officer and Vice President for Du Pont Global Sourcing and Logistics.
Prior to 2002, Mr. Campi led the Global Sourcing activities for GE Power Energy, and held a variety of positions with Federal
Mogul, Parker Hannifin Corporation and Price Waterhouse Coopers. Mr. Campi also serves as a Trustee of Case Western Reserve University,
has served as a Member of the Advisory Board of Directors for three startup companies, and has served as a Member of the Financial
Executives Institute and the Institute of Management Accountants. Mr. Campi received his MBA from Case Western Reserve University.
Our Board believes Mr. Campi&rsquo;s qualifications to serve as our Chief Executive Officer include his extensive executive and
advisory experience with established and startup companies, his expertise in cost-management, and his qualifications in the field
of supply chain management.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><I>Rani Kohen</I> has served as a Chairman of the Board since November 2012. Mr. Kohen
founded the Company and began development of the Company&rsquo;s power plug technology in 2004. Mr. Kohen served as the Company&rsquo;s
Chief Executive Officer until December 2012. Mr. Kohen has over twenty-five years in the retail lighting industry. He opened his
first retail lighting showroom in 1988 in Israel, and built the business into the largest chain of retail lighting showrooms in
the country. Our Board believes Mr. Kohen&rsquo;s qualifications to serve as Chairman of our Board include his deep understanding
of the Company&rsquo;s business and products, his years of experience in the retail lighting industry, and his past experience
as the Company&rsquo;s Chief Executive Officer.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><I>Governor Thomas J. Ridge</I> has served as a director since June 2013. In 2013,
Mr. Ridge co-founded Ridge Schmidt Cyber, an executive services firm addressing the increasing demands of cyber security. In
April 2010, Mr. Ridge became a partner in Ridge Policy Group, abi-partisan, full-service government affairs and issue
management group. Mr. Ridge has served as President and Chief Executive Officer of Ridge Global, LLC, a global strategic
consulting company, since July 2006. From January 2003 to January 2005, Mr. Ridge served as the Secretary of the United
States Department of Homeland Security, and from 2001 through January 2003, Mr. Ridge served as the Special Assistant to the
President for Homeland Security. Mr. Ridge served two terms as Governor of the Commonwealth of Pennsylvania from 1995 to
2001, and served as a member of the U.S. House of Representatives from 1983 through 1995. Mr. Ridge currently serves as a
member of the board of two public companies, The Hershey Company and Lifelock, and has previously served on the board of five
other public companies. Mr. Ridge is Chairman of the Board of the National Organization on Disability, and serves as a board
member on the Board of Public Finance Management, the Institute for Defense Analysis, the Center for the Study of the
Presidency, and the Oak Ridge National Lab. Our Board believes Mr. Ridge&rsquo;s qualifications to serve as a member of our
Board include his vast experience in both government and industry, his service on other public and private company boards,
and his expertise in retail, risk management, and cyber security.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><I>Phillips Peter</I> has served as a director
since November 2012. Since December 2014, Mr. Peter has served as a Senior Vice President of Ridge Global. From 1994 to 2014,
Mr. Peter practiced law at Reed Smith LLP where he focused his practice on legislative and regulatory matters before Congress,
the executive branch of the federal government, and other administrative agencies. Prior to this, Mr. Peter was an officer at
General Electric Company, where he held executive positions from 1973 to 1994. He is also a veteran of the U.S. Army. Our Board
believes Mr. Peter&rsquo;s qualifications to serve as a member of our Board include his role as a past advisor to the Company,
his extensive experience in regulatory affairs, his past industry experience, and his demonstrated leadership ability.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><I>Dov Shiff</I> has served as a director
since February 2014. Mr. Shiff is presently President and Chief Executive Officer of the Shiff Group of Companies. The Shiff Group
owns and operates hotels and other real estate in Israel, including Hayozem Resorts &amp; Hotels Ltd., Marina Hotel Tel Aviv Ltd.
and Zvidan Investments Ltd. Our Board believes Mr. Shiff&rsquo;s qualifications to serve as a member of our Board include his
role as a past advisor to the Company and his history of success developing and operating new businesses.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"></P>

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<P STYLE="margin: 0; text-align: justify"><I>Leonard J. Sokolow</I> has served as a
director since November 2015. Mr. Sokolow currently serves as CEO &amp; President of Newbridge Financial, Inc. and Chairman of
its broker dealer subsidiary, Newbridge Securities Corporation. Mr. Sokolow founded vFinance, Inc. in 1997, which merged with
National Holdings Corporation (NASDAQ CM: NHLD), where he served as President and Vice Chairman of its Board of Directors. Mr.
Sokolow also founded and served as Chairman and CEO of Americas Growth Fund, Inc., a closed-end investment management company
(NASDAQ: AGRO) until it was sold. Prior to this, Mr. Sokolow was an executive for Applica, Inc. (formerly Windmere Corporation
(NYSE: APN)), where he served as Executive Vice President and General Counsel. Mr. Sokolow, is also a CPA and worked for Ernst
Young and KPMG. Mr. Sokolow earned a Bachelor of Arts degree in Economics and a concentration in Accounting. Mr. Sokolow also
earned a Juris Doctorate degree from the University of Florida School of Law and a Masters of Law degree in Taxation from the
New York University School of Law. Mr. Sokolow is on the Board of Directors, Chairman of the Audit Committee and a member of the
Nominations and Corporate Governance Committees for Consolidated Water Company Ltd. (NASDAQ GS: CWCO). In addition, Mr. Sokolow
has sevred the Board of Directors of, and Chairman of the Audit Committee for, Alberta Oil Sands, Inc. (TSXV: AOS.V). Our Board
believes Mr. Soklow&rsquo;s qualifications to serve as a member of our Board include his vast education and experience in the
financial industry, his service on other public company boards and his history of executive leadership in developing and operating
businesses.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Corporate Governance</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Board Structure</I></B></P>

<P STYLE="margin: 0; text-align: justify">We have chosen to separate the Chief Executive
Officer and Board Chairman positions.&nbsp;&nbsp;We believe that this Board leadership structure is the most appropriate for the
Company.&nbsp;&nbsp;Our chairman, the founder of the Company, provides us with significant experience in research and development.
Our Chief Executive Officer who is responsible for day to day operations who brings significant experience to the Company.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Committees of the Board of Directors</I></B></P>

<P STYLE="margin: 0; text-align: justify">We have established a separately-designated
standing audit committee (the &ldquo;Audit Committee&rdquo;), chaired by Leonard J. Sokolow. Mr. Sokolow is deemed to be independent
and the Board has determined that he is an audit committee financial expert, as defined in Item 5(d)(5) of Regulation S-K.&nbsp;&nbsp;The
Audit Committee reviews, acts on and reports to the Board with respect to various auditing and accounting matters, including the
recommendations and performance of independent auditors, the scope of the annual audits, fees to be paid to the independent auditors,
and internal accounting and financial control policies and procedures.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We presently do not have a nominating committee,
compensation committee, or other committee or committees performing similar functions, as our management believes that until this
point it has been premature at the early stage of our management and business development to form such committees.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Moving forward, at such time as the Board believes
that such committees are necessary or desirable, or that we are required to have such committees, we will take steps to form such
committees and adopt charters as may be required to comply with all applicable rules and regulations.</P>



<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B>Involvement in Legal Proceedings</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We know of no pending proceedings to which
any director, member of senior management, or affiliate is either a party adverse to us, or our subsidiaries, or has a material
interest adverse to us or our subsidiaries.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">None of our executive officers or directors
have (i) been involved in any bankruptcy proceedings within the last five years, (ii) been convicted in or has pending any criminal
proceedings, (iii) been subject to any order, judgment or decree enjoining, barring, suspending or otherwise limiting involvement
in any type of business, securities or banking activity or (iv) been found to have violated any federal, state or provincial securities
or commodities law and such finding has not been reversed, suspended or vacated.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Shareholder Communications </B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Although we do not have a formal policy regarding
communications with the Board, shareholders may communicate with the Board by writing to us at 4400 North Point Parkway, Suite
154, Alpharetta, Georgia, 30022, Attention: Shareholder Communication. Shareholders who would like their submission directed to
a member of the Board may so specify, and the communication will be forwarded, as appropriate.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Certain Relationships and Related Transactions</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">Unless otherwise stated in this prospectus,
none of the following parties has, in our fiscal years ended 2014 and 2015, had any material interest, direct or indirect, in
any transaction with us or in any presently proposed transaction that has or will materially affect us:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">any of our directors or officers;</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">any person who beneficially owns, directly or indirectly, shares carrying more than
10% of the voting rights attached to our outstanding shares of common stock; or</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">any member of the immediate family (including spouse, parents, children, siblings
and in- laws) of any of the above persons.<BR CLEAR="ALL"></TD>
</TR></TABLE>





<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>EXECUTIVE COMPENSATION</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">As a &ldquo;smaller reporting company,&rdquo;
we have elected to follow scaled disclosure requirements for smaller reporting companies<I>. </I>Under the scaled disclosure obligations,
we are not required to provide <I>Compensation Discussion and Analysis </I>and certain other tabular and narrative disclosures
relating to executive compensation. Nor are we required to quantify payments due to the named executives upon termination of employment.
Management believes that the scaled disclosure for the Company&rsquo;s executive compensation policy and practices is appropriate
because we will be a small publicly-traded company, have only one named executive and have a relatively simple compensation policy
and structure that has not changed in the last fiscal year.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Named Executive Officers</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Our &ldquo;named executive officers&rdquo; for the 2015 fiscal
year consisted of the following:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">John P. Campi, our Chief Executive Officer</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">James R. Hills, our former Chief Executive Officer</TD>
</TR></TABLE>





<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Summary Compensation Table for Fiscal Years 2014 and 2015</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The following information is related to the
compensation paid, distributed or accrued by us for the last two fiscal years to our Chief Executive Officer (principal executive
officer).&nbsp;&nbsp;No employee received compensation in excess of $100,000 in the past two fiscal years.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="text-align: center; background-color: White; vertical-align: bottom; font-weight: bold">
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: 1.45pt; text-align: left; vertical-align: bottom">Name &amp; Principal Position </TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">Year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">Salary $</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">Bonus $</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">Stock Awards $</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">Option Awards (1) $</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">Non-Equity Incentive Plan Compensation $</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">Non-Qualified Deferred Compensation Earnings $</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">All Other Compensation $ </TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">Total $</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="text-align: center; background-color: White; vertical-align: bottom; font-weight: bold">
    <TD STYLE="padding-left: 1.45pt; text-align: left; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 37%; text-align: left; padding-bottom: 1pt; padding-left: 1.45pt">John P. Campi,<BR> </TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 4%; border-bottom: Black 1pt solid; text-align: right">2014</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 4%; border-bottom: Black 1pt solid; text-align: right">11,769</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 4%; border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 4%; border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 4%; border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 4%; border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 4%; border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 4%; border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left"><B>$</B></TD><TD STYLE="width: 4%; border-bottom: Black 1pt solid; text-align: right"><B>11,769</B></TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="text-align: right; background-color: White; vertical-align: middle">
    <TD STYLE="padding-left: 0; text-align: left; vertical-align: middle">Chief Executive Officer <SUP>(1)</SUP></TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>2015</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>$</TD><TD>102,000</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&mdash;&nbsp;&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>$</TD><TD>62,500</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&mdash;&nbsp;&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&mdash;&nbsp;&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&mdash;&nbsp;&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>$</TD><TD>14,376.19</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD><B>$</B></TD><TD><B>178,876.19</B></TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-left: 0">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 1.45pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">James R. Hills, former</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2014</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">155,308</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">62,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11,077</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><B>$</B></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><B>228,885</B></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="text-align: right; background-color: rgb(204,238,255); vertical-align: middle">
    <TD STYLE="padding-left: 1.45pt; text-align: left; vertical-align: middle"> Chief Executive Officer <SUP>(2)</SUP></TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>2015</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>$</TD><TD>&mdash;&nbsp;&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&mdash;&nbsp;&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&mdash;&nbsp;&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&mdash;&nbsp;&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&mdash;&nbsp;&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&mdash;&nbsp;&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>$</TD><TD>3,324.52</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD><B>$</B></TD><TD><B>3,324.52</B></TD><TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B>Outstanding Equity Awards at December 31, 2015 Fiscal Year End</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD STYLE="padding-bottom: 1pt; padding-left: 1.45pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="12" STYLE="text-align: center; border-bottom: Black 1pt solid; padding-left: 1.45pt">Option Awards</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="12" STYLE="text-align: center; border-bottom: Black 1pt solid">Stock Awards</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="text-align: center; background-color: White; font-weight: bold; vertical-align: bottom">
    <TD STYLE="width: 10%; border-bottom: Black 1pt solid; padding-left: 1.45pt">Name</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 10%; border-bottom: Black 1pt solid; padding-left: 1.45pt">Number of <BR> Securities <BR> underlying <BR> unexercised <BR> options <BR> exercisable</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid"><B>Number of </B><BR> <B>Securities </B><BR> <B>underlying </B><BR> <B>unexercised </B><BR> <B>options </B><BR> <B>not exercisable</B></TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1pt solid"><B>Option </B><BR> <B>exercise or </B><BR> <B>base price per share</B></TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1pt solid"><B>Option </B><BR> <B>Expiration Date</B></TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 9%; border-bottom: Black 1pt solid">Number of<BR> Shares or<BR> Units of Stock Not Vested</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Market Value </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>of Shares or Units Not Vested</B></P></TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 15%; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Equity Incentive Plan Awards:</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Number of Unearned Shares, Units or Other Rights Not Vested</B></P></TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 7%; border-bottom: Black 1pt solid"><B>Value of Unearned Shares, Units or Other Rights Not Vested</B></TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 1.45pt">John P. Campi<BR> Chief Executive Officer <SUP>(3)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; padding-left: 1.45pt">&mdash;&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; padding-left: 1.45pt">&mdash;&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 1.45pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; padding-left: 1.45pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; padding-left: 1.45pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 1.45pt">James R. Hills, former Chief Executive Officer <SUP>(2)</SUP> </TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; padding-left: 1.45pt">&mdash;&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp; </TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp; </TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; padding-left: 1.45pt">&mdash;&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(1)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Pursuant the CEO Agreement, Mr. Campi receives a gross annual salary of $102,000 per
year. Mr. Campi also received 750,000 shares of the Company&rsquo;s common stock, 250,000 shares of which vested on May 20, 2015,
and 500,000 shares of which vested on December 31, 2015. The value of the Stock Awards for 2015 is based on the value of shares
sold in connection with the Company&rsquo;s sale of securities as of the time of issuance, which was $0.25, and reflects only
the 250,000 shares of common stock which vested on May 20, 2015, because the 500,000 shares of common stock which vested on December
31, 2015 have not yet been issued. Mr. Campi received $14,376.19 in incentive compensation pursuant to the CEO Agreement during
2015.</TD>
</TR></TABLE>

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<TD STYLE="width: 15pt; text-align: right">(2)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">James R. Hills resigned from his position as Chief Executive Officer on November 21,
2014. Pursuant to a mutual agreement and release between Mr. Hills and the Company dated November 21, 2014 (the &ldquo;Hills Agreement&rdquo;),
Mr. Hills received 250,000 shares of the Company&rsquo;s common stock upon his resignation, and released the Company of any obligations
concerning future issuances of shares of the Company&rsquo;s common stock under his employment agreement. The value of the Stock
Awards is based on the value of shares sold in connection with the Company&rsquo;s sale of securities as of the time of issuance,
which was $0.25. Under the Hills Agreement, Mr. Hills will receive one half of one percent (0.50%) of gross revenue generated
solely from orders placed by Home Depot for a period of thirty-six (36) months from the date of such agreement (&ldquo;Hills Commissions&rdquo;).
Mr. Hills received $3,324.52 in Hills Commissions during 2015.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(3)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The 500,000 shares of common stock awarded to Mr. Campi pursuant to the CEO Agreement
which vested on December 31, 2015 have not yet been issued, pending certain determinations being made by Mr. Campi and the Company.</TD>
</TR></TABLE>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Employment Agreements</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">On November 21, 2014, the Company entered
into an Executive Employment Agreement (the &ldquo;CEO Agreement&rdquo;) with Mr. Campi to serve as its Chief Executive Officer.
The CEO Agreement provides that Mr. Campi will serve for an initial term ending December 31, 2015 (the &ldquo;Initial Term&rdquo;),
which may be renewed by the mutual agreement of Mr. Campi and the Company. Mr. Campi continues to perform under the terms of the
CEO Agreement, until such time as the parties agree upon an extension or modification of the terms therein.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Subject to other customary terms and conditions
of such agreements, the CEO Agreement provides that Mr. Campi will receive a base salary of $102,000 per year, which may be adjusted
each year at the discretion of the Company&rsquo;s Board. As further consideration, the CEO Agreement included a sign-on bonus
of 750,000 shares of the Company&rsquo;s common stock, which has fully vested. The 500,000 shares of common stock awarded to Mr.
Campi pursuant to the CEO Agreement which vested on December 31, 2015 have not yet been issued, pending certain determinations
being made by Mr. Campi and the Company.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The CEO Agreement also includes incentive
compensation equal to (i) one half of one percent (0.5%) of the first $20,000,000 of the Company&rsquo;s annual gross revenue
plus one quarter of one percent (0.25%) of the Company&rsquo;s annual gross revenue above $20,000,000; (ii) three percent (3%)
of the Company&rsquo;s annual net income; and (iii) five (5) year options to purchase shares of the Company&rsquo;s common stock
equal to one half of one percent (0.5%) of the Company&rsquo;s quarterly net income, with a strike price to be determined at the
time such options are granted.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Pursuant to the CEO Agreement, if terminated
without cause after the Initial Term, Mr. Campi will be entitled to receive half of his then applicable annual base salary. Under
the CEO Agreement, termination for cause includes (i) acts of fraud, embezzlement, theft or neglect of or refusal to perform the
duties of our Chief Executive Officer, provided that such refusal or neglect is materially injurious to our financial condition
or our reputation; (ii) a material violation of the CEO Agreement left uncured for more than 30 days; or (iii) Mr. Campi&rsquo;s
death, disability or incapacity.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Consulting Agreements</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">On November 25, 2013, the Company entered
into a Consulting Agreement with our founder and the Chairman or our Board, Rani Kohen (the &ldquo;Consulting Agreement&rdquo;).
The term of the Consulting Agreement is for three (3) years, beginning on December 1, 2013. Subject to the customary terms and
conditions of such agreements, the Consulting Agreement provides that Mr. Kohen will receive an annual consulting fee of $150,000,
which may be increased each year at our Board of Director&rsquo;s discretion. As further consideration, the Consulting Agreement
includes incentive compensation in the form cash, stock and/or options (i) equal to one-half a percent (0.5%) of our annual gross
revenue; and (ii) to be determined by our Board on a project-by-project basis. Mr. Kohen received $14,376.19 in incentive compensation pursuant to the Consulting Agreement during 2015.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">Pursuant to the Consulting Agreement, if terminated
by our Board without cause, Mr. Kohen will be entitled to receive all unpaid salary due through the term of the Consulting Agreement,
and any incentive compensation or other bonus compensation then due. If otherwise terminated by the Board, Mr. Kohen will be entitled
to only receive 50% of the unpaid applicable annual consulting fee. Under the Consulting Agreement, termination for cause includes
(i) an act of fraud, embezzlement, or theft; (ii) a material violation of the Consulting Agreement left uncured for more than
30 days; or (iii) Mr. Kohen&rsquo;s death, disability or incapacity.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Equity Incentive Plan Information</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The following table sets forth equity compensation
plan information as of January 11, 2014:</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid"><B>Plan category</B></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(a)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Number of securities to be issued upon exercise of outstanding options, warrants and rights</B></P></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(b)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Weighted-average exercise price of outstanding options, warrants and rights</B></P></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(c)</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))</B></P></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 7.5pt">Equity compensation plans not approved by security holders:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 35%; text-align: left; padding-left: 25.5pt">2015 Equity Incentive Plan</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 19%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 19%; text-align: right">5,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Equity compensation plans approved by security holders</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 1.5pt; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;&nbsp;&nbsp;Total</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,000,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>2015 Equity Incentive Plan</I></B></P>

<P STYLE="margin: 0; text-align: justify">On April 27, 2015, our Board approved the
Company&rsquo;s 2015 Equity Incentive Plan (the &ldquo;Plan&rdquo;). Under the Plan, the Board has the sole authority to implement,
interpret, and/or administer the Plan unless the Board delegates (i) all or any portion of its authority to implement, interpret,
and/or administer the Plan to a committee of the Board, or (ii) the authority to grant and administer awards under the Plan to
an officer of the Company. The Plan relates to the issuance of up to 5,000,000 shares of our common stock, subject to adjustment,
and shall be effective for ten (10) years, unless earlier terminated. No single participant under the Plan may receive more than
25% of all options awarded in a single year.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Any employee of the Company or an affiliate,
a director, or a consultant to the Company or an affiliate may be an &ldquo;Eligible Person&rdquo; under the Plan. The Plan provides
Eligible Persons the opportunity to participate in the enhancement of shareholder value by the award of options and Common Stock,
granted as stock bonus awards, restricted stock awards, deferred share awards and performance-based awards, under the Plan. The
Company may make payment of bonuses and/or consulting fees to certain Eligible Persons in options and common stock, or any combination
thereof.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Certain options to be granted to employees
under the Plan are intended to qualify as Incentive Stock Options (&ldquo;ISOs&rdquo;) pursuant to Section 422 of the Internal
Revenue Code of 1986, as amended (the &ldquo;Code&rdquo;), while other options granted under the Plan will be nonqualified options
not intended to qualify as Incentive Stock Options ISOs (&ldquo;Nonqualified Options&rdquo;), either or both as provided in the
agreements evidencing the options described.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">On November 15, 2015, the Board authorized
the Company to grant certain securities under the Plan, in the aggregate amount of up to 3,990,000 options to purchase shares
of our common stock, vesting in part immediately and entirely over the next two years, and up to 75,000 shares of our common stock,
vesting immediately. As of January 11, 2016, the Company has not issued shares of common stock or options to purchase shares of
common stock under the Plan.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Stock Options</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Board, or the appointed committee, shall
have sole and absolute discretionary authority (i) to determine, authorize, and designate those persons pursuant to the Plan who
are to receive options under the Plan, (ii) to determine the number of shares of common stock to be covered by such options and
the terms thereof, (iii) to determine the type of option granted (ISO or Nonqualified Option), and (iv) to determine other such
details concerning the vesting, termination, exercise, transferability and payment of such options. The Committee shall thereupon
grant options in accordance with such determinations as evidenced by a written option agreement. Subject to the express provisions
of the Plan, the committee shall have discretionary authority to prescribe, amend and rescind rules and regulations relating to
the Plan, to interpret the Plan, to prescribe and amend the terms of the option agreements and to make all other determinations
deemed necessary or advisable for the administration of the Plan.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The exercise price per share for common stock
of options granted under the Plan shall be determined by the Committee, but in no case shall be less than one hundred percent
(100%) of the fair market value of the common stock (determined in accordance with the Plan at the time the option is granted),
provided that, with respect to ISOs granted to a person who holds ten percent (10%) or more of the total combined voting power
of all classes of stock of the Company, the exercise price per share for common stock shall not be less than 110% of the fair
market value of the common stock. The fair market value of the common stock with respect to which ISOs may be exercisable for
the first time by any Eligible Person during any calendar year under all such plans of the Company and its affiliates shall not
exceed $100,000, or such other amount provided in Section 422 of the Code.</P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Bonus and Restricted Stock Awards</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Board, or the applicable committee, may,
in its sole discretion, grant awards of common stock in the form of bonus awards and restricted stock awards. Each stock award
agreement shall be in such form and shall contain such terms and conditions as the Board, or the committee, deems appropriate.
The terms and conditions of each stock award agreement may change from time to time and need not be uniform with respect to Eligible
Persons, and the terms and conditions of separate stock award agreements need not be identical.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Deferred Stock Awards</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Board, or the committee, may authorize
grants of shares of common stock to be awarded at a future date upon such terms and conditions as the Board, or the committee,
may determine. Such awards shall be conferred upon the Eligible Person as consideration for the performance of services and subject
to the fulfillment of specified conditions during the deferral period. Each deferred stock award agreement shall be in such form
and shall contain such terms and conditions as the Board, or the committee, deems appropriate. The terms and conditions of each
deferred stock award agreement may change from time to time and need not be uniform with respect to Eligible Persons, and the
terms and conditions of separate deferred stock award agreements need not be identical.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Performance Share Awards</I></B></P>

<P STYLE="margin: 0; text-align: justify">The Board, or the committee, may authorize grants of shares of common stock to be
awarded upon the achievement of specified performance objectives, upon such terms and conditions as the Board, or the
committee, may determine. Such awards shall be conferred upon the Eligible Person upon the achievement of specified
performance objectives during a specified performance period, such objectives being set forth in the grant and including a
minimum acceptable level of achievement and, optionally, a formula for measuring and determining the number of performance
shares to be issued. Each performance share award agreement shall be in such form and shall contain such terms and conditions
as the Board, or the committee, deems appropriate. The terms and conditions of each performance share award may change from
time to time and need not be uniform with respect to Eligible Persons, and the terms and conditions of separate performance
share award agreements need not be identical.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Adjustments</I></B></P>

<P STYLE="margin: 0; text-align: justify">If the Company shall effect a subdivision
or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the
number of shares of the common stock outstanding, without receiving consideration therefore in money, services or property, then
(i) the number, class, and per share price of shares of common stock subject to outstanding options and other awards under the
Plan and (ii) the number of and class of shares then reserved for issuance under the Plan and the maximum number of shares for
which awards may be granted to an Eligible Person during a specified time period shall be appropriately and proportionately adjusted.
The Board, or a committee, shall make such adjustments, and its determinations shall be final, binding and conclusive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B><I>Change in Control</I></B></P>

<P STYLE="margin: 0; text-align: justify">If the Company is merged or consolidated with
another entity or sells or otherwise disposes of substantially all of its assets to another company while options or stock awards
remain outstanding under the Plan, unless provisions are made in connection with such transaction for the continuance of the Plan
and/or the assumption or substitution of such options or stock awards with new options or stock awards covering the stock of the
successor company, or parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices,
then all outstanding options and stock awards which have not been continued, assumed or for which a substituted award has not
been granted shall, whether or not vested or then exercisable, unless otherwise specified in the stock option or stock award agreement,
will terminate immediately as of the effective date of any such merger, consolidation or sale.</P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B><I>Federal Income Tax Consequences</I></B></P>

<P STYLE="margin: 0; text-align: justify">Subject to other customary terms, the Company
may, prior to certificating any common stock, deduct or withhold from any payment pursuant to a stock option or stock award agreement
an amount that is necessary to satisfy any withholding requirement of the Company in which it believes, in good faith, is necessary
in connection with U.S. federal, state, local or transfer taxes as a consequence of the issuance or lapse of restrictions on such
common stock.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Director Compensation</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We do not pay cash compensation to our directors
for service on our Board and our employees do not receive cash compensation for serving as members of our Board.&nbsp;&nbsp;Directors
are reimbursed for reasonable expenses incurred in attending meetings and carrying out duties as board members.&nbsp;&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">On November 15, 2015, our Board approved the
Company&rsquo;s Director Compensation Policy (the &ldquo;Policy&rdquo;) applicable to members of the Board who are not employees
of the Company (each, an &ldquo;Eligible Director&rdquo;). Under the Policy, upon election to the Board, a new Eligible Director
shall be entitled to a grant of 50,000 shares of our common stock and an option to purchase up to 150,000 shares of our common
stock, vested monthly and fully vested after one year, at a price per share determined as of the date of grant, based on (a) the
prior days&rsquo; closing price if there is a public market for our common stock, or (b) if there is no public market for our
common stock, the price per share in our most recently completed private placement of our common stock or convertible securities
(&ldquo;Director Options&rdquo;). The amount of shares and Director Options shall be prorated based on the date of a new Eligible
Director&rsquo;s appointment relative to the term remaining, if applicable.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Eligible Directors will also receive Director
Options to purchase either (a) 10,000 shares of our common stock for each Board meeting in which such Eligible Director attends
in person, or (b) 5,000 shares of our common stock for each Board meeting in which such Eligible Director attends telephonically.
Eligible Directors will also receive Director Options to purchase 25,000 shares of our common stock following each year in which
he or she has served on the Board. Director Options will vest monthly over the course of the year following the date such Director
Options are granted, and must be exercised within five years of the grant date.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">In addition, the Policy provides that (a)
the chairperson of the Board will receive Director Options to purchase 100,000 shares of our common stock as an annual retainer,
payable quarterly, unless otherwise provided by an independent compensation agreement; (b) the chairperson of the Corporate Governance
and Nominating Committee of the Board, if applicable, will receive Director Options to purchase 25,000 shares of our common stock
as an annual retainer, payable quarterly; (c) the chairperson of the Audit Committee of the Board, if applicable, will receive
a number of shares of common stock equal to $12,000, based on the same price per share method applied to Director Options, and
Director Options to purchase 50,000 shares of our common stock, both as an annual retainer, payable quarterly; (d) the chairperson
of the Compensation Committee of the Board, if applicable, will receive Director Options to purchase 30,000 shares of our common
stock as an annual retainer, payable quarterly; (e) other members of the Audit Committee of the Board, if applicable, will receive
Director Options to purchase 15,000 shares of our common stock as an annual retainer, payable quarterly; and (f) other members
of the Corporate Governance Committee and Nominating and Compensation Committee of the Board, if applicable, will receive Director
Options to purchase 10,000 shares of our common stock as an annual retainer, payable quarterly.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">As of January 11, 2016, the Company has not
issued shares of common stock or Director Options under the Policy.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Messrs. Peter and Ridge each received options
on September 3, 2013, which expire five (5) years from the grant date, to purchase 100,000 shares of our common stock at an exercise
price of $0.375 as compensation for past services on our Board.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Indemnification of Officers and Directors</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">Our bylaws provide that we shall indemnify,
to the fullest extent permitted by applicable law, our officers, directors, employees and agents against expenses incurred in
connection with actions or proceedings brought against them by reason of their serving or having served as officers, directors,
employees, agents or in other capacities.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We currently maintain director&rsquo;s and
officer&rsquo;s liability insurance through AON Risk Solutions from AIG.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to our directors and officers pursuant to the foregoing provisions, or otherwise,
we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>PRINCIPAL SHAREHOLDERS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The following table sets forth certain information
with respect to the beneficial ownership of common stock by: (i) each director, (ii) each of the executive officers of the Company,
(iii) all current directors and executive officers as a group, and (iv) each stockholder known to the Company to be the beneficial
owner of more than 5% of the outstanding shares of the Company&rsquo;s common stock. Unless otherwise indicated in the footnotes
to the table, all information set forth in the table is as of January 11, 2016.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B>Directors and Named Executive Officers</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Title of Class</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">Name and Address of Beneficial Owner</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Amount and Nature of Beneficial Ownership (1)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Percent of Class (1)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 16%; text-align: center; vertical-align: top">Common Stock</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 42%; text-align: left">Mr. Rani Kohen <BR>KRNB Holdings LLC&nbsp;<BR> 3245 Peachtree Parkway&nbsp;<BR> Suwanee, GA 30024 (2)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 19%; text-align: right">8,003,969</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 16%; text-align: right">19.06</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 5.75pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Mr. Phillips Peter&nbsp;<BR> 1140 Connecticut Avenue, NW<BR> Suite 510<BR> Washington, D.C. 20036 (3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 5.75pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Mr. Thomas Ridge&nbsp;<BR> 1140 Connecticut Avenue, NW <BR> Suite 510&nbsp;<BR> Washington, D.C. 20036 (4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,225,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.89</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 5.75pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Mr. Dov Shiff&nbsp;<BR> 167 Hayarkon Street&nbsp;<BR> Tel Aviv 31032 Israel (5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,964,618</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32.33</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 5.75pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; padding-left: 5.75pt">John P. Campi (6)<BR> 4400 North Point Parkway<BR> Suite 154<BR> Alpharetta, GA 30022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,050,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.47</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 5.75pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-weight: bold">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">All Directors and Officers as a Group (5 persons)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,543,587</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54.07</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;&nbsp;</B></P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;Stockholders
with 5% Beneficial Ownership</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Title of Class</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">Name and Address of Beneficial Owner</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Amount and Nature of Beneficial Ownership (1)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Percent of Class (1)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 16%; text-align: center; vertical-align: top">Common Stock</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 42%; text-align: left">Mr. Dov Shiff&nbsp;<BR> 167 Hayarkon Street&nbsp;<BR> Tel Aviv 31032 Israel (5)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 19%; text-align: right">14,964,618</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 16%; text-align: right">32.33</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">KRNB Holdings LLC&nbsp;<BR> 3245 Peachtree Parkway&nbsp;<BR> Suwanee, GA 30024 (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,003,969</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19.06</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">Motek 7 SQL LLC <BR> 19101 Mystic Pointe Drive <BR> Apt. 2808 <BR> Aventura, FL 33180 (7)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,771,566</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18.50</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">Steven Siegelaub <BR>2801 N. University Dr. Suite 301 <BR>Coral Springs, FL 33065 (8)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,702,875</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.26</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">David S. Nagelberg 2003 Revocable Trust DTD 7/2/03 <BR> 99 Coast Boulevard, Unit 21 DE <BR> LaJolla, CA 92037 (9)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,615,865</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.98</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">Mr. James R. Hills <BR> 675 West Paces Ferry Rd NW, Unit #4 <BR> Atlanta, GA 30327 (10)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,704,901</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.19</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">Dutchess Opportunity Fund II LP <BR> 50 Commonwealth Avenue, Suite 2 <BR> Boston, MA 02116 (11)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,402,880</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.59</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; vertical-align: top">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">Harry Mittelman Rev. Living Trust <BR> 12100 Kate Drive <BR> Los Altos Hills, CA 94022 (12)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,313,755</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.22</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">* Less than 1%</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(1)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Applicable percentages are based on 42,001,251 shares outstanding, adjusted as required
by rules of the SEC. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment
power with respect to securities. Shares of common stock subject to options, warrants and convertible notes currently exercisable
or convertible, or exercisable or convertible within 60 days are deemed outstanding for computing the percentage of the person
holding such securities but are not deemed outstanding for computing the percentage of any other person. Unless otherwise indicated
in the footnotes to this table, the Company believes that each of the shareholders named in the table has sole voting and investment
power with respect to the shares of common stock indicated as beneficially owned by them.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(2)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. Rani Kohen beneficially owns these shares as Manager of KRNB Holdings LLC.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(3)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. Phillips Peter beneficially owns 300,000 shares of our common stock, including
(i) 200,000 shares of common stock, and (ii) 100,000 shares of common stock issuable upon exercise of options held by Mr. Phillips
Peter.</TD>
</TR></TABLE>

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<TD STYLE="width: 15pt; text-align: right">(4)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. Thomas Ridge beneficially owns 1,225,000 shares of our common stock, including
(i) 875,000 shares of common stock, (ii) 100,000 shares of common stock issuable upon exercise of options held by Mr. Thomas Ridge,
(iii) 50,000 shares of common stock issuable upon exercise of Warrants issued pursuant to the Notes Offering and (iv) 200,000
shares of common stock issuable upon conversion of the Notes issued pursuant to the Notes Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(5)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. Dov Shiff beneficially owns 14,964,618 shares of our common stock, including (i)
9,004,618 shares of common stock owned prior to the May Stock Offering, (ii) 1,670,000 shares of common stock obtained pursuant
to the Stock Offerings, (ii) 1,690,000 shares of common stock issuable upon exercise of Warrants issued pursuant to the Notes
Offering and (iii) 2,600,000 shares of common stock issuable upon conversion of the Notes issued pursuant to the Notes Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(6)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. John P. Campi beneficially owns 1,050,000 shares of our common stock, including
(i) 750,000 shares of common stock obtained pursuant to the CEO Agreement, all of which have vested, but 500,000 shares of which
have not yet been issued, (ii) 250,000 shares of common stock obtained pursuant to the May Stock Offering, and (iii) 50,000 shares
of common stock obtained pursuant to the November Stock Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(7)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. Hillel Bronstein beneficially owns these shares as Manager of Motek 7 SQL LLC.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(8)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. Steven Siegelaub, in his personal capacity and as the Managing Member of 301 Office
Ventures, LLC, Enterprise 2013, LLC, and Investment 2013, LLC, Safety Investors 2014, LLC beneficially owns 3,702,875 shares of
our common stock, including (i) 83,333 shares of common stock obtained pursuant to the May Stock Offering, (ii) 875,000 shares
of common stock owned by 301 Office Ventures, LLC prior to the May Stock Offering, (iii) 762,254 shares of common stock beneficially
owned by Enterprise 2013, LLC, consisting of (a) 577,046 shares of common stock owned prior to the May Stock Offering, and (b)
185,208 shares of common stock issuable upon exercise of certain warrants owned by Enterprise 2013, LLC, (iv) 1,189,972 shares
of common stock beneficially owned by Investment 2013, LLC, consisting of (a) 219,303 shares of common stock owned prior to the
May Stock Offering, (b) 194,134 shares of common stock issuable upon exercise of Warrants issued pursuant to the Notes Offering,
and (c) 776,535 shares of common stock issuable upon conversion of the Notes issued pursuant to the Notes Offering, and (v) 1,667,316
shares of common stock beneficially owned by Safety Investors 2014, LLC, consisting of (a) 17,316 shares of common stock owned
prior to the May Stock Offering, (b) 650,000 shares of common stock issuable upon exercise of Warrants issued pursuant to the
Notes Offering, and (c) 1,000,000 shares of common stock issuable upon conversion of the Notes issued pursuant to the Notes Offering.</TD>
</TR></TABLE>

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<TD STYLE="width: 15pt; text-align: right">(9)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The David S. Nagelberg 2003 Revocable Trust DTD 7/2/03 beneficially owns 3,615,865
shares of our common stock, including (i) 315,865 shares of common stock, (ii) 1,300,000 shares of common stock issuable upon
exercise of Warrants issued pursuant to the Notes Offering and (iii) 2,000,000 shares of common stock issuable upon conversion
of the Notes issued pursuant to the Notes Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(10)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mr. James R. Hills beneficially owns 2,704,901 shares of our common stock, including
(i) 980,818 shares of common stock, (ii) 74,083 shares of common stock issuable upon exercise of certain warrants owned by Mr.
James R. Hills, (iii) 650,000 shares of common stock issuable upon exercise of Warrants issued pursuant to the Notes Offering,
and (iv) 1,000,000 shares of common stock issuable upon conversion of the Notes issued pursuant to the Notes Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(11)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Dutchess Opportunity Fund II LP beneficially owns 2,402,880 shares of our common stock,
including (i) 1,402,880 shares of common stock, (ii) 200,000 shares of common stock issuable upon exercise of Warrants issued
pursuant to the Notes Offering and (iii) 800,000 shares of common stock issuable upon conversion of the Notes issued pursuant
to the Notes Offering.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">(12)</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">The Harry Mittelman Revocable Living Trust beneficially owns 2,313,755 shares of our
common stock, including (i) 3,755 shares of common stock, (ii) 910,000 shares of common stock issuable upon exercise of Warrants
issued pursuant to the Notes Offering and (ii) 1,400,000 shares of common stock issuable upon conversion of the Notes issued pursuant
to the Notes Offering.</TD>
</TR></TABLE>



<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>RELATED PARTY TRANSACTIONS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We are currently party to a consulting agreement with Mr. Rani
Kohen, Chairman of the Company&rsquo;s Board, pursuant to which we are required to pay cash compensation in the amount of $150,000
per year.</P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>DESCRIPTION OF SECURITIES</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We are authorized to issue 500,000,000 shares
of common stock, no par value per share.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Common Stock</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The holders of common stock are entitled to
one vote per share on all matters submitted to a vote of shareholders, including the election of directors. There is no cumulative
voting in the election of directors. The holders of common stock are entitled to any dividends that may be declared by the board
of directors out of funds legally available for payment of dividends subject to the prior rights of holders of preferred stock
and any contractual restrictions we have against the payment of dividends on common stock. In the event of our liquidation or
dissolution, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the
liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no preemptive rights and have
no right to convert their common stock into any other securities.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Registration Rights</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">On November 26, 2013, May 8, 2014 and June
25, 2014, we entered into registration rights agreements (the &ldquo;Notes Registration Rights Agreements&rdquo;) with investors
in connection with the Notes Offering. The Notes Registration Rights Agreements required us to file, within sixty (60) days following
execution of the applicable Notes Registration Rights Agreement and to have a registration statement declared effective by the
SEC within ninety (90) days thereafter. Our registration statement declared effective by the SEC on October 22, 2014 was filed
to satisfy our obligation under the Notes Registration Rights Agreements.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Because we were unable to file a registration
statement pursuant to terms of each Notes Registration Rights Agreement dated as of November 26, 2013 and May 8, 2014, we were
in default under such Notes Registration Rights Agreements for the Notes sold in November 2013 and May 2014 until we filed the
registration statement on August 1, 2014. In addition, because we were unable to have such registration statement declared effect
pursuant to terms of each Notes Registration Rights Agreement dated as of November 26, 2013 and May 8, 2014, we were in default
under such Notes Registration Rights Agreements for the Notes sold in November 2013 and May 2014 until the Notes Registration
Statement was declared effective by the SEC on October 22, 2014. The penalties associated with the Notes Registration Rights Agreements
were paid by the Company to the holders of the Notes sold in November 2013 and May 2014 in the form of cash or shares of our common
stock, based on each holder&rsquo;s election.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In connection with the Stock Offerings, the
Company entered into a 2015 Registration Rights Agreement with each investor, whereby the Company agreed to prepare and file a
registration statement with the SEC to register the Offering Shares within one hundred fifty (150) days after date of the applicable
2015 Registration Rights Agreement. If the Company could not file the registration statement by such date for each applicable
2015 Registration Rights Agreement, the Company would have been required to pay a filing default penalty to the applicable investor
equal to two percent (2%) of the gross proceeds paid by such investor.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Election Letter and Forbearance Agreement</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In November 2015, the Company invited investors
in the first closing of the Notes Offering dated November 26, 2013 (the November 2013 Investors&rdquo;), with respect to outstanding
principal and interest due under their respective Notes, to (i) receive payment in cash, (ii) convert their Notes into shares
of the Company&rsquo;s common stock, or (iii) forbear an election for three (3) months, or until February 26, 2016, pursuant to
a forbearance agreement, during such time interest under their respective Notes would continue to accrue (collectively, the &ldquo;Election
Letter and Forbearance Agreement&rdquo;). All November 2013 Investors elected to forbear an election pursuant to the Election
Letter and Forbearance Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify"><B>Anti-Takeover Provisions &ndash; Florida Law </B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Unless a corporation opts out, the Florida
Business Corporation Act (FBCA) prohibits the voting of shares in a publicly-held Florida corporation that are acquired in a &ldquo;control
share acquisition&rdquo; unless the holders of a majority of the corporation&rsquo;s voting shares (exclusive of shares held by
officers of the corporation, inside directors, or the acquiring party) approve the granting of voting rights as to the shares
acquired in the control share acquisition. A &ldquo;control share acquisition&rdquo; is defined in the FBCA as an acquisition
that immediately thereafter entitles the acquiring party to vote in the election of directors within any of the following ranges
of voting power: one-fifth or more but less than one-third of all voting power, one-third or more but less than a majority of
all voting power, and a majority or more of all voting power. However, an acquisition of a publicly-held Florida corporation&rsquo;s
shares is not deemed to be a control-share acquisition if it is either (i)&nbsp;approved by such corporation&rsquo;s board of
directors before the acquisition, or (ii)&nbsp;made pursuant to a merger agreement to which such Florida corporation is a party.
Our articles of incorporation include a provision which opts us out of the &ldquo;control share acquisition&rdquo; statute under
the FBCA.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Dividends</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We have not paid dividends on our common stock
since inception and do not plan to pay dividends on our common stock in the foreseeable future.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>Transfer Agent</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Pacific Stock Transfer is acting as our transfer
agent.&nbsp;&nbsp;The address information for Pacific Stock Transfer is 4045 South Spencer Street, Suite 403, Las Vegas, NV 89119,
the phone number is (702) 361-3033 and the facsimile is (702) 433-1979.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Share Eligible for Future Sale</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We are registering 4,282,666 shares of common stock, of which all such shares are issued
and outstanding.&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>PLAN OF DISTRIBUTION</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify">Shares of the Company&rsquo;s common stock
are quoted on the OTCQB&reg; Venture Market under the symbol &ldquo;SQFL&rdquo;. To the Company's knowledge, only a small percentage
of our total issued and outstanding shares of common stock have been deposited with broker/dealers as of the date of this prospectus,
and no shares of our common stock have yet been offered for sale. Therefore, while our shares of common stock are eligible for
trading, a liquid public market has not yet developed. We cannot predict the future prices at which our shares will trade, or
the liquidity of a public market for our shares of common stock, should one develop.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Selling security holders are offering up to
4,282,666 shares of common stock. The selling security holders may offer their shares  at prevailing market prices or privately negotiated prices.
We will not receive proceeds from the sale of shares from the selling security holders.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The securities offered by this prospectus
will be sold by the selling security holders from time to time, in one or more transactions. The distribution of the securities
by the selling security holders may be effected in one or more transactions that may take place in the over-the-counter market,
including broker&rsquo;s transactions or privately negotiated transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">The selling security holders may pledge all or a portion of the securities owned
as collateral for margin accounts or in loan transactions, and the securities may be resold pursuant to the terms of such
pledges, margin accounts or loan transactions. Upon default by such selling security holders, the pledge in such loan
transaction would have the same rights of sale as the selling security holders under this prospectus. The selling security
holders may also enter into exchange traded listed option transactions, which require the delivery of the securities listed
under this prospectus. After our securities are qualified for quotation on the over the counter bulletin board, the selling
security holders may also transfer securities owned in other ways not involving market makers or established trading markets,
including directly by gift, distribution, or other transfer without consideration, and upon any such transfer the transferee
would have the same rights of sale as such selling security holders under this prospectus.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">In addition to the above, each of the selling
security holders will be affected by the applicable provisions of the Exchange Act, including, without limitation, Regulation
M, which may limit the timing of purchases and sales of any of the securities by the selling security holders or any such other
person. Unless granted an exemption by the SEC from Regulation M under the Exchange Act, or unless otherwise permitted under Regulation
M, the selling security holder will not engage in any stabilization activity in connection with our common stock, will furnish
each broker or dealer engaged by the selling security holder and each other participating broker or dealer the number of copies
of this prospectus required by such broker or dealer, and will not bid for or purchase any common stock of our or attempt to induce
any person to purchase any of the common stock other than as permitted under the Exchange Act.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Following the effectiveness of the registration
statement, of which this prospectus forms a part, the selling security holders may, from time to time on a continuous
basis, offer and sell their shares.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">There can be no assurances that the selling
security holders will sell any or all of the securities. In various states, the securities may not be sold unless these securities
have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is
complied with.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">All of the foregoing may affect the marketability
of our securities. Pursuant to oral promises we made to the selling security holders, we will pay all the fees and expenses incident
to the registration of the securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Should any substantial change occur regarding
the status or other matters concerning the selling security holders or us, we will file a post-effective amendment to the Registration
Statement, of which this prospectus amends and forms a part, disclosing such matters.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>OTCQB Considerations</B></P>

<P STYLE="margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="margin: 0; text-align: justify">The OTCQB is separate and distinct from the
NASDAQ stock market. NASDAQ has no business relationship with issuers of securities quoted on the OTCQB. The SEC&rsquo;s order
handling rules, which apply to NASDAQ-listed securities, do not apply to securities quoted on the OTCQB.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Although the NASDAQ stock market has rigorous
listing standards to ensure the high quality of its issuers, and can delist issuers for not meeting those standards, the OTCQB
has no listing standards. Rather, it is the market maker who chooses to quote a security on the system, files the application,
and is obligated to comply with keeping information about the issuer in its files. FINRA cannot deny an application by a market
maker to quote the stock of a company. The only requirement for inclusion in the bulletin board is that the issuer be current
in its reporting requirements with the SEC.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">Investors must contact a broker-dealer to
trade OTCQB securities. Investors do not have direct access to the bulletin board service. For bulletin board securities, there
only has to be one market maker.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">Bulletin board transactions are conducted
almost entirely manually. Because there are no automated systems for negotiating trades on the bulletin board, they are conducted
via telephone. In times of heavy market volume, the limitations of this process may result in a significant increase in the time
it takes to execute investor orders. Therefore, when investors place market orders - an order to buy or sell a specific number
of shares at the current market price - it is possible for the price of a stock to go up or down significantly during the lapse
of time between placing a market order and getting execution. Because bulletin board stocks are usually not followed by analysts,
there may be lower trading volume than for NASDAQ-listed securities.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>LEGAL MATTERS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The validity of the securities offered hereby
will be passed upon for us by Thompson Hine LLP, New York, New York.&nbsp;&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>EXPERTS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">The audited consolidated financial statements
appearing in this prospectus for the&nbsp;years ended December 31, 2014 and 2013, have been audited
by L&amp;L CPAS, PA, f/k/a Bongiovanni &amp; Associates, PA, an independent registered public accounting firm, as set forth in
their report appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>ADDITIONAL INFORMATION</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We have filed a registration statement
on Form S-1 under the Securities Act with the SEC with respect to the shares of common stock we are offering by this prospectus. This
prospectus does not contain all the information set forth in the registration statement.&nbsp;&nbsp;For
further information with respect to us and the shares of our common stock to be sold in this offering, we make reference to the
registration statement.&nbsp; Whenever we make reference in this prospectus to any of our contracts, agreements or other documents,
the references are not necessarily complete, and you should refer to the exhibits attached to the registration statement for copies
of the actual contract, agreement or other document.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">We are required to file annual, quarterly
and current reports and other information with the SEC. You can read and copy any of this information at the SEC&rsquo;s Public
Reference Room at 100 F Street, N.E., Washington, D.C. 20549 on official business days during the hours of 10:00 a.m. to 3:00
p.m. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. This information
is also available from the SEC&rsquo;s website at http://www.sec.gov.</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><B>FINANCIAL
STATEMENT</B>S</P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>SAFETY QUICK LIGHTING &amp; FANS CORP
AND SUBSIDIARY</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>FOR THE PERIODS ENDED SEPTEMBER 30, 2015 AND 2014</B></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase"><B></B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="font-weight: bold; text-align: center">Safety Quick Lighting &amp; Fans Corp. and Subsidiary</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="font-weight: bold; text-align: center">Consolidated Balance Sheets</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">(Unaudited)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">(Audited)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2014*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-decoration: none; text-align: center; padding-bottom: 1pt"><U>Assets</U></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; padding-left: 9px">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">667,473</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,241,487</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">116,878</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Inventory</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">514,186</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,060</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,643</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9px">Other current assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 18px">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,316,597</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,271,130</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 18px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 18px">Furniture and Equipment - net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">119,191</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">132,609</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 18px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Patent - net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">71,016</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46,419</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Debt issue costs - net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,848</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">161,946</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">GE trademark license - net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,739,130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,565,217</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9px">Other assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">65,714</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">65,714</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 18px">Total other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,920,708</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,839,296</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 18px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 27px">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,356,496</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,243,035</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-decoration: none; text-align: center; border-bottom: Black 1pt none"><U>Liabilities and
    Stockholders (Deficit)</U></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Accounts payable &amp; accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,077,981</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,041,741</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Convertible debt - net of $948,197 net of debt discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,516,036</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,223,982</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Convertible debt - related parties - net of $5,785 debt discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,215</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,999</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Notes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">106,676</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">98,086</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Derivative liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,009,481</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,651,762</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9px">Other current liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">55,623</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">78,622</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 18px">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,810,012</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,121,192</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Long term liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Convertible debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">688,013</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Convertible debt - related parties - net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Notes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">221,218</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">307,009</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9px">GE royalty obligation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11,821,957</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">12,000,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 18px">Total long term liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,043,175</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,995,022</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 27px">Total liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">28,853,187</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">20,116,214</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 18px"></TD></TR></TABLE>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;<B>Safety Quick Lighting &amp; Fans Corp. and Subsidiary</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>Consolidated Balance Sheets</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="text-align: center; background-color: White; vertical-align: bottom">
    <TD STYLE="font-weight: bold; padding-left: 18px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD><B>(Unaudited)</B></TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD><B>(Audited)</B></TD><TD>&nbsp;</TD></TR>
<TR STYLE="text-align: center; background-color: White; vertical-align: bottom">
    <TD STYLE="font-weight: bold; padding-left: 18px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD><B>September 30, 2015</B></TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD><B>December 31, 2014*</B></TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Stockholders' deficit:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 18px"><P STYLE="margin-top: 0; margin-bottom: 0">Common stock: $0 par value, 500,000,000 shares authorized; 41,067,918 and
                                                     35,750,000 shares issued and outstanding at September 30, 2015 and
                                                     December 31, 2014 respectively</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">127,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">127,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="text-align: center; background-color: rgb(204,238,255); vertical-align: bottom">
    <TD STYLE="font-weight: bold; padding-left: 18px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,822,105</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,359,127</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9px">Accumulated deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(28,410,754</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(15,324,264</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 18px; width: 70%">Total Stockholders' deficit</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 12%">(19,461,249</TD><TD STYLE="text-align: left; width: 1%">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 12%">(8,837,737</TD><TD STYLE="text-align: left; width: 1%">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9px">Noncontrolling interest</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(35,442</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(35,442</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 18px">Total Deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(19,496,691</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,873,179</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 27px">Total liabilities and stockholders' deficit</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,356,496</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,243,035</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;The accompanying notes are an integral part of these condensed
consolidated financial statements.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">* There is a non-material variation in the Unaudited Financial Statements for the period ended September 30, 2015 and the
Audited Financial Statement for the period ended December 31, 2014 and 2013, due to rounding.</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="17" STYLE="font-weight: bold; text-align: center">Safety Quick Lighting &amp; Fans Corp. and Subsidiary</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="17" STYLE="font-weight: bold; text-align: center">Consolidated Statements of Operations</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="17" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt none"><U>Nine Months Ended September
    30, 2015 and 2014</U></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="17" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt none"><U>(Unaudited)</U></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three months</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2014</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; font-weight: bold; text-align: left">Sales</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">262,897</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,482,035</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Cost of sales</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(248,675</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,195,655</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,222</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">286,380</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">General and administrative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,220,844</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">481,922</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,741,198</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,419,989</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Loss from operations</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,206,622</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(481,922</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,454,818</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,419,989</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 18px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Other income (expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(880,394</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(701,328</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,273,951</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,515,577</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Derivative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(568,485</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Change in fair value of embedded derivative liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,993,408</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">209,235</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,357,719</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">433,901</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Other income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">787</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,026</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9px">Other expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(102,470</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(320,619</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9px">Total other expense - net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,873,802</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(593,776</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(9,631,670</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,969,754</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net loss including noncontrolling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,080,424</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,075,698</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,086,489</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,389,743</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9px">Less: net loss attributable to noncontrolling interest</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(12,908</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(40,677</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net loss attributable to Safety Quick Lighting &amp; Fans Corp.</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(10,080,424</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,062,790</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(13,086,489</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(3,349,066</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net loss per share - basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.25</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.03</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.34</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.10</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 0">Weighted average number of common shares outstanding
    during the year - basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">40,479,962</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">35,645,607</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">38,131,295</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">35,092,872</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center">The accompanying notes are an integral part of these condensed consolidated financial statements.</P>




<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"></P>

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<P STYLE="margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase"><B>&nbsp;&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="font-weight: bold; text-align: center">Safety Quick Lighting &amp; Fans Corp. and Subsidiary</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="font-weight: bold; text-align: center">Consolidated Statements of Cash Flows</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><U>Nine Months Ended September 30, 2015
    and 2014</U></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><U>(Unaudited)</U></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine months</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 72%; text-align: left; padding-left: 9px">Net loss attributable to Safety Quick Lighting &amp; Fans Corp.</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(13,086,489</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(3,349,066</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Net loss attributable to noncontrolling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(40,677</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Adjustments to reconcile net loss to net cash used in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 18px">Depreciation expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,471</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,732</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 18px">Amortization of debt issue costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">117,098</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">103,388</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 18px">Amortization of debt discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,621,257</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,099,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 18px">Amortization of patent</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,705</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,174</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 18px">Amortization of GE trademark license</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,826,087</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 18px">Change in fair value of derivative liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,357,719</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(433,902</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 18px">Derivative expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">568,486</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 18px">Recognition of unvested share compensation - related party - ($0.25 / share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46,875</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 18px">Stock options issued for services - related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 18px">Change in operating assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 27px">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(116,878</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 27px">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,583</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(44,634</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 27px">Inventory</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(514,186</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 27px">Royalty payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(178,043</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 27px">Other</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(22,999</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(27,020</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 27px">Accounts payable &amp; accrued expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">36,239</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">722,632</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 36px">Net cash used in operating activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,865,936</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,338,612</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cash flows from investing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Purchase of property &amp; equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,053</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(180,895</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9px">Payment of patent costs</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(28,302</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(9,200</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 36px">Net cash used in investing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(31,355</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(190,095</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Direct issue costs paid</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(69,944</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Proceeds from issuance of convertible notes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,270,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Stock issued in exchange for interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">429,646</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9px">Repayments of notes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(77,201</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(33,342</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9px">Repayments of notes - related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,108</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9px">Proceeds from issuance of stock</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,970,832</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 36px">Net cash provided by financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,323,277</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,141,706</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">(Decrease) Increase cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(574,014</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">612,999</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Cash and cash equivalents at beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,241,487</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,132,974</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Cash and cash equivalents at end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">667,473</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,745,973</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD></TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD COLSPAN="5" STYLE="text-align: center; vertical-align: bottom"><B>Nine Months</B></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="text-align: center; background-color: White; vertical-align: bottom">
    <TD STYLE="width: 72%">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD><TD STYLE="width: 10%"><B>September 30, 2015</B></TD><TD STYLE="width: 1%">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD><TD STYLE="width: 10%"><B>September 30, 2014</B></TD><TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Supplementary disclosure of non-cash financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9px">Reduction in principal balance of notes from escrow balance</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">40,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9px">Debt discount recorded on convertible debt accounted for as a derivative liability</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,249,459</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9px">Reclassification of derivative liability to additional paid-in-capital</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">214,769</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 27px">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Supplementary disclosure of cash flow information</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash paid during the period for:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9px">Interest</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">457,297</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">16,658</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying notes are an integral part of these condensed consolidated financial statements.</P>




<P STYLE="margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase"></FONT></P>

<P STYLE="margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase"><B></B></FONT></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 1 Organization and Nature of Operations</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Safety Quick Lighting &amp; Fans Corp.,
a Florida corporation (the &ldquo;Company&rdquo;), was originally organized in May 2004 as a limited liability company under the
name of Safety Quick Light, LLC (&ldquo;SQL-LLC&rdquo;). The Company was converted to corporation on November 6, 2012. The Company
holds a number of worldwide patents, and has received a variety of final electrical code approvals, including UL-Listing and CSA
approval (for the United States and Canadian Markets), and CE (for the European market). The Company maintains an office in Foshan,
Peoples Republic of China with three staff of quality control engineers.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company is engaged in the business
of developing proprietary technology that enables a quick and safe installation by the use of a power plug for electrical fixtures,
such as light fixtures and ceiling fans, into ceiling and wall electrical junction boxes. The Company&rsquo;s main technology consists
of a fixable socket and a revolving plug for conducting electric power and supporting an electrical appliance attached to a wall
or ceiling. The socket is comprised of a non-conductive body that houses conductive rings connectable to an electric power supply
through terminals in its side exterior.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The plug is also comprised of a non-conductive
body that houses corresponding conductive rings, attaches to the socket via a male post and is capable of feeding electric power
to an appliance. The plug also includes a second structural element allowing it to revolve and a releasable latching which, when
engaged, provides a retention force between the socket and the plug to prevent disengagement. The socket and plug can be detached
by releasing the latch, disengaging the electric power from the plug. The socket is designed to replace the support bar incorporated
in electric junction boxes, and the plug can be installed in light fixtures, ceiling fans and wall sconce fixtures.&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company markets consumer friendly,
energy saving &ldquo;Plug-In&rdquo; ceiling fans and light fixtures under the GE brand as well as &ldquo;conventional&rdquo; ceiling
lights and fans carrying the GE brand. The Company also owns 98.8% of SQL Lighting &amp; Fans LLC (the &ldquo;Subsidiary&rdquo;).
The Subsidiary was formed in Florida on April 27, 2011, and is in the business of manufacturing the patented device that the Company
owns. The Subsidiary had no activity during the periods presented.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company&rsquo;s fiscal year end
is December 31.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 2 Summary of Significant
Accounting Policies</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Basis of Presentation </B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The accompanying consolidated financial
statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of
America (U.S. GAAP) under the accrual basis of accounting.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Use of Estimates</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The preparation
of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and accompanying notes.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Such estimates
and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and
inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate
of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt
discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Making estimates
requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating
its estimate could change in the near term due to one or more future non-conforming events. Accordingly, actual results could differ
significantly from estimates.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Risks and Uncertainties</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company&rsquo;s
operations are subject to risk and uncertainties including financial, operational, regulatory and other risks including the potential
risk of business failure.&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company
has experienced, and in the future expects to continue to experience, variability in its sales and earnings.&nbsp;&nbsp;The factors
expected to contribute to this variability include, among others, (i) the uncertainty associated with the commercialization and
ultimate success of the product, (ii) competition inherent at large national retail chains where product is expected to be sold
(iii) general economic conditions and (iv)&nbsp;the related volatility of prices pertaining to the cost of sales.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Principles
of Consolidation</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The consolidated financial statements
include the accounts of Safety Quick Lighting &amp; Fans Corp and the Subsidiary, SQL Lighting &amp; Fans LLC. All inter-company
accounts and transactions have been eliminated in consolidation.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Non-Controlling Interest</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In May 2012, in connection with the
sale of the Company&rsquo;s member units in the Subsidiary, the Company&rsquo;s ownership percentage in the Subsidiary decreased
from 98.8% to 94.35%. The Company then reacquired these member units in June 2013, increasing the ownership percentage from 94.35%
back to 98.8%. During 2014, there was no activity in the Subsidiary. Its pro rata share of the Company&rsquo;s 2014 loss from operations
is recognized in the financial statements.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Cash and Cash Equivalents</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Cash and cash equivalents are carried
at cost and represent cash on hand, demand deposits placed with banks or other financial institutions, and all highly liquid investments
with an original maturity of three months or less. The Company had $667,473 and $1,241,487 in money market as of September 30,
2015 and December 31, 2014, respectively.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Accounts
Receivable and Allowance for Doubtful Accounts</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Accounts receivable
are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary
course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company
recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries.
The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs,
as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company&rsquo;s
net balance of accounts receivable for three-months ended September 30, 2015 and December 31, 2014:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 56%; text-align: left; padding-left: 5.4pt">&nbsp;Accounts Receivable</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">116,878</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;Allowance for Doubtful Accounts</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;Net Accounts Receivable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">116,878</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company
had no sales in 2014. All amounts are deemed collectible at September 30, 2015, and the Company has not incurred any bad debt expense.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Inventory</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Inventory consists of finished goods
purchased, which are valued at the lower of cost or market value, with cost being determined on the first-in, first-out method.&nbsp;&nbsp;The
Company periodically reviews historical sales activity to determine potentially obsolete items and also evaluates the impact of
any anticipated changes in future demand.&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">At September
30, 2015 and December 31, 2014, the Company had $514,186 and $0 in inventory, respectively. The Company maintains an allowance
based on specific inventory items which have shown no activity over a 24-month period. The Company tracks inventory as it is disposed,
scrapped or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method.
As of September 30, 2015, the Company has determined that no allowance is required.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Valuation
of Long-Lived Assets and Identifiable Intangible Assets</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The
Company reviews for impairment of long-lived assets and certain identifiable intangible assets whenever events or changes in circumstances
indicate that the carrying amount of any asset may not be recoverable. In the event of impairment, the asset is written down to
its fair market value. The Company determined no impairment adjustment was necessary for the periods presented.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Property
and Equipment</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Property and
equipment is stated at cost, less accumulated depreciation, and is reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Depreciation
of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 5-7 years
of the respective assets. Expenditures for maintenance and repairs are charged to expense as incurred.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Upon sale or
retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain
or loss is reflected in the statements of operations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Intangible Asset - Patent</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company developed a patent for an
installation device used in light fixtures and ceiling fans. Costs incurred for submitting the applications to the United States
Patent and Trademark Office for these patents have been capitalized. Patent costs are being amortized using the straight-line method
over the related 15 year lives. The Company begins amortizing patent costs once a filing receipt is received stating the patent
serial number and filing date from the Patent Office.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company incurs certain legal and
related costs in connection with patent applications. The Company capitalizes such costs to be amortized over the expected life
of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available
to the Company. The Company also capitalizes legal costs incurred in the defense of the Company&rsquo;s patents when it is believed
that the future economic benefit of the patent will be maintained or increased and a successful defense is probable. Capitalized
patent defense costs are amortized over the remaining expected life of the related patent. The Company&rsquo;s assessment of future
economic benefit or a successful defense of its patents involves considerable management judgment, and an unfavorable outcome of
litigation could result in a material impairment charge up to the carrying value of these assets.</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>GE Trademark Licensing Agreement</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company entered into a Trademark
License Agreement with General Electric (&ldquo;GE&rdquo;) on June, 2011 (the &ldquo;License Agreement&rdquo;) allowing the Company
to utilize the &ldquo;GE trademark&rdquo; on products which meet the stringent manufacturing and quality requirements of General
Electric. As described further in Note 5 to these financial statements, the Company and General Electric amended the License Agreement
in August 2014. As a result of that amendment, the Company is required to pay a minimum Trademark Licensing Fee (Royalty Obligation)
to General Electric of $12,000,000. The repayment schedule is based on a percent of sales, with any unpaid balance due in December,
2018. Under SFAS 142 &ldquo;Accounting for Certain Intangible Assets&rdquo; the Company has recorded the value of the Licensing
Agreement and will amortize it over the life of the License Agreement, which is 60 months.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Fair Value of Financial Instruments</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company
measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair
value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability,
as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that
market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes
a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques,
are assigned a hierarchical level.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The following
are the hierarchical levels of inputs to measure fair value:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Level 1 &ndash; Observable
inputs that reflect quoted market prices in active markets for identical assets or liabilities</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets
that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are
observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data
by correlation or other means.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Level 3 &ndash;&nbsp;Unobservable
inputs reflecting the Company&rsquo;s assumptions incorporated in valuation techniques used to determine fair value. These assumptions
are required to be consistent with market participant assumptions that are reasonably available.</FONT></TD>
</TR></TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The carrying amounts of the Company&rsquo;s
financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable &amp; accrued expenses,
certain notes payable and notes payable &ndash; related party, approximate their fair values because of the short maturity of these
instruments.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for its derivative
liabilities, at fair value, on a recurring basis under level 3. See Note 8.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Embedded Conversion Features</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company evaluates embedded conversion
features within convertible debt under ASC 815 &ldquo;Derivatives and Hedging&rdquo; to determine whether the embedded conversion
feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value
recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated
under ASC 470-20 &ldquo;Debt with Conversion and Other Options&rdquo; for consideration of any beneficial conversion features.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Derivative Financial Instruments</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company does not use derivative
instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of it financial instruments,
including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially
recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or
credits to income.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">For option-based simple derivative
financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception
and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded
as liabilities or as equity, is re-assessed at the end of each reporting period.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Beneficial
Conversion Feature</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">For conventional
convertible debt where the rate of conversion is below market value, the Company records a &quot;beneficial conversion feature&quot;
(&quot;BCF&quot;) and related debt discount.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">When the Company
records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt
instrument (offset to additional paid in capital) and amortized to interest expense over the life of the debt.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Debt Issue
Costs and Debt Discount</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company
may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt.&nbsp;&nbsp;These
costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life
of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Original
Issue Discount</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">For certain
convertible debt issued, the Company may provide the debt holder with an original issue discount.&nbsp;&nbsp;The original issue
discount would be recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the
life of the debt.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Extinguishments of Liabilities</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company accounts for extinguishments
of liabilities in accordance with ASC 860-10 (formerly SFAS 140) &ldquo;Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilities&rdquo;. When the conditions are met for extinguishment accounting, the liabilities are derecognized
and the gain or loss on the sale is recognized.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Stock-Based
Compensation &ndash; Employees</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company
accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under
the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting
Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which
goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value
of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The measurement
date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete
or the date on which it is probable that performance will occur.&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">If the Company
is a newly formed corporation or shares of the Company are thinly traded, the use of share prices established in the Company&rsquo;s
most recent private placement memorandum (based on sales to third parties) (&ldquo;PPM&rdquo;), or weekly or monthly price observations
would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due
to a larger spread between the bid and asked quotes and lack of consistent trading in the market.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The fair value of share options and similar instruments is estimated
on the date of grant using a Black-Scholes option-pricing valuation model.&nbsp;&nbsp;The ranges of assumptions for inputs are
as follows:</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Expected term of share options
and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or
warrant are expected to be outstanding.&nbsp;&nbsp;Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards
Codification the expected term of share options and similar instruments represents the period of time the options and similar
instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees&rsquo;
expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments.&nbsp;&nbsp;Pursuant
to paragraph 718-10-S99-1, it may be appropriate to use the&nbsp;simplified method,&nbsp;i.e.,&nbsp;expected term = ((vesting
term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data to provide a reasonable
basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii)
A company significantly changes the terms of its share option grants or the types of employees that receive share option grants
such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii)
A company has or expects to have significant structural changes in its business such that its historical exercise data may no
longer provide a reasonable basis upon which to estimate expected term. The Company uses the simplified method to calculate expected
term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable
basis upon which to estimate expected term.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Expected volatility of the
entity&rsquo;s shares and the method used to estimate it.&nbsp;&nbsp;Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded
or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company
to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons
for selecting that particular index, and how it has calculated historical volatility using that index.&nbsp;&nbsp;The Company
uses the average historical volatility of the comparable companies over the expected contractual life of the share options or
similar instruments as its expected volatility.&nbsp;&nbsp;If shares of a company are thinly traded the use of weekly or monthly
price observations would generally be more appropriate than the use of daily price observations as the volatility calculation
using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes
and lack of consistent trading in the market.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Expected annual rate of quarterly
dividends.&nbsp;&nbsp;An entity that uses a method that employs different dividend rates during the contractual term shall disclose
the range of expected dividends used and the weighted-average expected dividends.&nbsp;&nbsp;The expected dividend yield is based
on the Company&rsquo;s current dividend yield as the best estimate of projected dividend yield for periods within the expected
term of the share options and similar instruments.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Risk-free rate(s). An entity
that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.&nbsp;&nbsp;The risk-free
interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of
the share options and similar instruments.</FONT></TD>
</TR></TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Generally,
all forms of share-based payments, including stock option grants, warrants and restricted stock grants and stock appreciation rights
are measured at their fair value on the awards&rsquo; grant date, based on estimated number of awards that are ultimately expected
to vest.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The expense resulting from share-based
payments is recorded in general and administrative expense in the statements of operations.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Stock-Based
Compensation &ndash; Non Employees</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><U>Equity Instruments
Issued to Parties Other Than Employees for Acquiring Goods or Services</U></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company
accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Sub-topic
505-50 of the FASB Accounting Standards Codification (&ldquo;Sub-topic 505-50&rdquo;).</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Pursuant to
ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments
are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever
is more reliably measurable.&nbsp;&nbsp;The measurement date used to determine the fair value of the equity instrument issued is
the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.&nbsp;&nbsp;If
the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the
Company&rsquo;s most recent private placement memorandum (&ldquo;PPM&rdquo;), or weekly or monthly price observations would generally
be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread
between the bid and asked quotes and lack of consistent trading in the market.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The fair value
of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model.&nbsp;&nbsp;The
ranges of assumptions for inputs are as follows:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Expected term of share options
and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected
term of share options and similar instruments represents the period of time the options and similar instruments are expected to
be outstanding taking into consideration of the contractual term of the instruments and holder&rsquo;s expected exercise behavior
into the fair value (or calculated value) of the instruments.&nbsp;&nbsp;The Company uses historical data to estimate holder&rsquo;s
expected exercise behavior.&nbsp;&nbsp;If the Company is a newly formed corporation or shares of the Company are thinly traded
the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments
as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected
term.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Expected volatility of the
entity&rsquo;s shares and the method used to estimate it.&nbsp;&nbsp;Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded
or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company
to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons
for selecting that particular index, and how it has calculated historical volatility using that index.&nbsp;&nbsp;The Company
uses the average historical volatility of the comparable companies over the expected contractual life of the share options or
similar instruments as its expected volatility.&nbsp;&nbsp;If shares of a company are thinly traded the use of weekly or monthly
price observations would generally be more appropriate than the use of daily price observations as the volatility calculation
using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes
and lack of consistent trading in the market.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Expected annual rate of quarterly
dividends.&nbsp;&nbsp;An entity that uses a method that employs different dividend rates during the contractual term shall disclose
the range of expected dividends used and the weighted-average expected dividends.&nbsp;&nbsp;The expected dividend yield is based
on the Company&rsquo;s current dividend yield as the best estimate of projected dividend yield for periods within the expected
term of the share options and similar instruments.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Risk-free rate(s). An entity
that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.&nbsp;&nbsp;The risk-free
interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of
the share options and similar instruments.</FONT></TD>
</TR></TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Pursuant to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable
equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance
is required by the grantee to retain those equity instruments), then,&nbsp;because of the elimination of any obligation on the
part of the counterparty to earn the equity instruments, a measurement date has been reached.&nbsp;A grantor shall recognize the
equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding cost is
an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements
of paragraph&nbsp;505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor
may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity
instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific
performance is required by the grantee in order to retain those equity instruments).&nbsp;Such an asset shall not be displayed
as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall
not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred
to other than employees in exchange for goods or services. Section&nbsp;505-50-30 provides guidance on the determination of the
measurement date for transactions that are within the scope of this Subtopic.&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Pursuant to
Paragraphs 505-50-25-8 and 505-50-25-9,&nbsp;an entity may grant fully vested, non-forfeitable equity instruments that are exercisable
by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee
achieves specified performance conditions.&nbsp;Any measured cost of the transaction shall be recognized in the same period(s)
and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead
of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share
option and similar instrument that the counterparty has the right to exercise expires unexercised.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Pursuant to
ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable
equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received
(that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement
date and no entry should be recorded.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Revenue Recognition</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company derives revenues from the
sale of a patented device.&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Revenue is
recorded when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) asset is transferred to
the customer without further obligation, (3) the sales price to the customer is fixed or determinable, and (4) collectability is
reasonably assured.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Cost of Sales</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Cost of sales
represents costs directly related to the production and third party manufacturing of the Company&rsquo;s products.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Product sold
is typically shipped directly to the customer from the third party manufacturer; costs associated with shipping and handling is
shown as a component of cost of sales.&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Earnings (Loss) Per Share</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Basic net earnings (loss) per share
is computed by dividing net income (loss) for the period by the weighted average number of common stock outstanding during each
period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number
of common stock, common stock equivalents and potentially dilutive securities outstanding during each period.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company uses the &ldquo;treasury
stock&rdquo; method to determine whether there is a dilutive effect of outstanding convertible debt, option and warrant contracts.
For the nine-months ended September 30, 2015 and 2014, the Company reflected net loss and a dilutive net loss, and the effect of
considering any common stock equivalents would have been anti-dilutive for the period. Therefore, separate computation of diluted
earnings (loss) per share is not presented for the periods presented.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has the following common
stock equivalents at September 30, 2015 and 2014:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 56%; padding-left: 5.4pt">Convertible Debt&nbsp;&nbsp;(Exercise price - $0.25/share)</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">18,056,932</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">18,056,932</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">Stock Warrants (Exercise price - $0.001 - $0.375/share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,062,234</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,728,984</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">Stock Options (Exercise price - $0.375/share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Unvested Restricted Stock - Chief Executive Officer</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">500,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-bottom: 2.5pt; padding-left: 5.4pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">27,819,166</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">27,985,916</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Related Parties</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company follows subtopic 850-10
of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Pursuant to Section 850-10-20 the related
parties include a) Affiliates of the Company; b) Entities for which investments in their equity securities would be required, absent
the election of the fair value option under the Fair Value Option Subsection of Section 825&ndash;10&ndash;15, to be accounted
for by the equity method by the investing entity; c) Trusts for the benefit of employees, such as pension and profit-sharing trusts
that are managed by or under the trusteeship of management; d) Principal owners of the Company; e) Management of the Company; f)
Other parties with which the Company may deal if one party controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate
interests; and g) Other parties that can significantly influence the management or operating policies of the transacting parties
or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that
one or more of the transacting parties might be prevented from fully pursuing its own separate interests.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The consolidated financial statements
shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and
other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation
of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a). the nature
of the relationship(s) involved; b). a description of the transactions, including transactions to which no amounts or nominal amounts
were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to
an understanding of the effects of the transactions on the financial statements; c). the dollar amounts of transactions for each
of the periods for which income statements are presented and the effects of any change in the method of establishing the terms
from that used in the preceding period; and d). amounts due from or to related parties as of the date of each balance sheet presented
and, if not otherwise apparent, the terms and manner of settlement.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Contingencies</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company follows subtopic 450-20
of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date
the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when
one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently
involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company
or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings
or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">If the assessment of a contingency indicates
that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in the Company&rsquo;s financial statements. If the assessment indicates that a potentially material
loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Loss contingencies considered remote
are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. However, there is
no assurance that such matters will not materially and adversely affect the Company&rsquo;s business, consolidated financial position,
and consolidated results of operations or consolidated cash flows.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>Subsequent
Events</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company
follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events.&nbsp;The
Company will evaluate subsequent events through the date when the&nbsp;financial statements are issued.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Pursuant to
ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued
when they are widely distributed to users, such as through filing them on EDGAR.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><B>Recently
Issued Accounting Pronouncements</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In September 2014, the FASB issued ASU
2014-15,<I> Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern.</I> This ASU describes how an
entity should assess its ability to meet obligations and sets disclosure requirements for how this information should be disclosed
in the financial statements. The standard provides accounting guidance that will be used with existing auditing standards. The
amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods
thereafter. Early application is permitted. The adoption of this guidance will be examined for the year ended December 31, 2016,
and if applicable at that time, will require management to make the appropriate disclosures.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In April 2015, the FASB issued Accounting Standards Update
No.&nbsp;2015-03,&nbsp;<I>Interest&mdash;Imputation of Interest (Topic 835-30): Simplifying the Presentation of Debt Issuance
Costs</I>&nbsp;(&ldquo;ASU 2015-03&rdquo;). ASU 2015-03 requires that debt issuance costs related to a recognized debt
liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability,
consistent with debt discounts. The recognition and measurement guidance for debt issuance costs is not affected by ASU
2015-03. ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December&nbsp;15, 2015,
and interim periods within those fiscal years. Early adoption is permitted. Upon adoption, the Company will reclassify debt
issuance costs from prepaid expenses and other current assets and other assets as a reduction to debt in the condensed
consolidated balance sheets. The Company is not planning to early adopt ASU 2015-03 and does not anticipate that the adoption
of ASU 2015-03 will materially impact its condensed consolidated financial statements.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In July 2015, the Financial Accounting
Standards Board (&ldquo;FASB&rdquo;) issued Accounting Standards Update No.&nbsp;2015-11,&nbsp;<I>Inventory (Topic 330): Simplifying
the Measurement of Inventory</I>&nbsp;(&ldquo;ASU 2015-11&rdquo;), which applies guidance on the subsequent measurement of inventory.
ASU 2015-11 states that an entity should measure inventory at the lower of cost and net realizable value. Net realizable value
is the estimated selling price in the ordinary course of business, less reasonable predictable costs of completion, disposal and
transportation. The guidance excludes inventory measured using last-in, first-out or the retail inventory method. ASU 2015-11 is
effective for interim and annual reporting periods beginning after December&nbsp;15, 2016. Early adoption is permitted. The Company
is not planning to early adopt ASU 2015-11 and is currently evaluating ASU 2015-11 to determine the potential impact to its condensed
consolidated financial statements and related disclosures.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Other pronouncements
issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or
are not expected to be significant to the Company&rsquo;s financial position, results of operations or cash flows.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note
3 Furniture and Equipment</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Property and equipment consisted of
the following at September 30, 2015 and December 31, 2014:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 56%; text-align: left; padding-left: 5.4pt">Office Equipment</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">122,322</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">120,759</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Furniture and Fixtures</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">30,561</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">29,071</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">Total</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">152,883</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">149,830</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Less: Accumulated Depreciation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(33,692</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(17,221</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Property and Equipment - net</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">119,191</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">132,609</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 4 Intangible Assets</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Intangible assets -patents consisted
of the following at September 30, 2015 and December 31, 2014:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 56%; padding-left: 5.4pt">Patents</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">89,992</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">61,690</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Less: Impairment Charges</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Less: Accumulated Amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(18,976</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(15,271</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Patents - net</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">71,016</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">46,419</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">At September 30, 2015, future amortization
of intangible assets was as follows:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="font-weight: bold">Year Ending December 31</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 48%; text-align: center; vertical-align: bottom">2015</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 20%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 28%; text-align: right">1,512</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">2016</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,967</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">2017</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,999</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">2018</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,999</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">2019</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,999</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2020 and Thereafter</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">45,540</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">71,016</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Actual amortization expense in future
periods could differ from these estimates as a result of future&nbsp;acquisitions, divestitures, impairments and other factors.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 5 GE Trademark License Agreement</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company entered into an amended License Agreement with
General Electric regarding the trademarking of its products. The License Agreement is amortized through its expiration in November
2018.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%; text-align: left; padding-left: 5.4pt">GE Trademark License</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">12,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">12,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Less: Impairment Charges</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Less: Accumulated Amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,260,870</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,434,783</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Patents &ndash; net</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7,739,130</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,565,217</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">At September
30, 2015 future amortization of intangible assets is as follows for the remaining:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: left; vertical-align: bottom">Year Ending December 31</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 43%; text-align: center; vertical-align: bottom">2015</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 25%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 28%; text-align: right">615,384</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">2016</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,448,161</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">2017</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,441,472</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom">2018</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,234,113</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7,739,130</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 6 Note Payable to Bank</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">At September 30, 2015 and December 31,
2014 the Company had a note payable to a bank in the amount of $327,894 and $405,095 respectively. The note dated May 2007 is due
in monthly payments of $10,000 and carries interest at 10%. The note is secured by the assets of the Company and personal guarantees
by a shareholder and an officer of the Company, and is due August 2018.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Principal payments due under the terms
of this note are as follows:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD COLSPAN="3" STYLE="font-weight: bold; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Principal Due in Next 12 months</B></FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 48%; text-align: center; vertical-align: bottom">2015</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 20%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 28%; text-align: right">106,676</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">2016</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">111,894</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">2017</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97,386</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom">2018</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11,938</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">327,894</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 7 Convertible Debt - Net&nbsp;</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company has recorded derivative
liabilities associated with convertible debt instruments, as more fully discussed at Notes 8 and 12 (B).</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Third Party</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Related Party</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Totals</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; padding-left: 5.4pt">Balance December 31, 2013</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">361,245</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">50,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">411,245</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">Proceeds</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,270,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,270,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">Repayments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Less: gross debt discount recorded</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,203,354</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(46,105</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,249,459</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Add: Amortization of Debt Discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,484,004</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,104</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,507,108</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;Balance December 31, 2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,911,995</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,999</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,938,994</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Add: Amortization of Debt Discount</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,604,041</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">17,216</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,621,257</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">Balance September 30, 2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,516,036</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,215</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,560,251</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Less Current portion</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,516,036</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(44,215</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,560,251</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Long-Term Convertible Debt</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In connection with the $2,270,100 convertible
debt offering in May 2014, the Company issued 5,390,100 detachable warrants. The notes and warrants were treated as derivative
liabilities.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">On November 26, 2013, May 8,
2014 and June 25, 2014 the Company completed an offering (the &ldquo;Notes Offering&rdquo;) of its 12% Secured Convertible Promissory
Notes (the &ldquo;12% Notes&rdquo;) in the aggregate principal amount of $4,240,100 and/or its 15% Secured Convertible Promissory
Notes in the aggregate principal amount of $30,000 (the &ldquo;15% Notes&rdquo;, and together with the 12% Notes, each a &ldquo;Note&rdquo;
and collectively, the &ldquo;Notes&rdquo;), as applicable, with certain &ldquo;accredited investors&rdquo; (the &ldquo;Investors&rdquo;),
as defined under Regulation D, Rule 501 of the Securities Act. The entire aggregate principal amount of the Notes of $4,270,100
was outstanding as of September 30 2015, such amount being exclusive of securities converted into the Notes separate from the Notes
Offering. Pursuant to the Notes Offering, the Company received $1,752,803, $1,400,000 and $800,500 in net proceeds on November
26, 2013, May 8, 2014 and June 25, 2014, respectively.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In addition to the terms customarily
included in such instruments, the Notes began accruing interest on the date that each Investor submitted the principal balance
of such Investor&rsquo;s Note, with the interest thereon becoming due and payable on the one year anniversary of said date, and
quarterly thereafter. Upon a default of the Notes, the interest rate will increase by 2% for each 30 day period until cured. The
principal balance of each Note and all unpaid interest will become due and payable twenty-four (24) months after the date of issuance.
The Notes may be prepaid with or without a penalty depending on the date of the prepayment. The principal and interest under the
Notes are convertible into shares of the Company&rsquo;s common stock at $0.25 per share and are secured by a first priority lien
(subject only to an existing note with Signature Bank of Georgia on the Company&rsquo;s intellectual property and all substitutes,
replacements and proceeds of such intellectual property) pursuant to the terms of a Security Purchase Agreement, dated as of November
26, 2013, May 8, 2014 and June 25, 2014, as applicable, by and between the Company and each Investor.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Pursuant to the Notes Offering,
each Investor also received five (5) year common stock warrants to purchase the Company&rsquo;s common stock at $0.375 per share
(each a &ldquo;Warrant&rdquo; and collectively, the &ldquo;Warrants&rdquo;). Investors of the 12% Notes received Warrants with
25% coverage based on a pre-determined valuation of the Company. Investors of the 15% Notes received Warrants with 15% coverage
based on the pre-determined valuation of the Company. Investors with a principal investment amount equal to or greater than $250,000
received Warrants with a bonus 40% coverage (&ldquo;Bonus Coverage&rdquo;); however, if an Investor previously invested $250,000
or more in the Notes Offering, such Investor received Bonus Coverage if such Investor subsequently invested $100,000 or more in
the Notes Offering. In addition to the terms customarily included in such instruments, the Warrants may be exercised by the Investors
by providing to the Company a notice of exercise, payment and surrender of the Warrant.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In connection with the Notes
Offering, the Company entered into Registration Rights Agreements, each dated as of November 26, 2013, May 8, 2014 and June 25,
2014 and each by and between us and each of the Investors (collectively, the &ldquo;Registration Rights Agreements&rdquo;) whereby
the Company agreed to prepare and file a registration statement with the SEC within sixty (60) days after execution of the applicable
Registration Rights Agreement and to have the registration statement declared effective by the SEC within ninety (90) days thereafter.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Because the Company was unable
to file a registration statement pursuant to the terms of each Registration Rights Agreements dated as of November 26, 2013 or
May 8, 2014, the Company was in default under such Registration Rights Agreements (the &ldquo;Filing Default Damages&rdquo;). Pursuant
to the Registration Rights Agreement, the Filing Default Damages mandate that the Company shall pay to the Investors, for each
thirty (30) day period of such failure and until the filing date of the registration statement and/or the common stock may be sold
pursuant to Rule 144, an amount in cash, as partial liquidated damages and not as a penalty, equal to 2% percent of the aggregate
gross proceeds paid by the Investors for the Notes. If the Company fails to pay any partial liquidated damages in full within five
(5) days of the date payable, which is the Note maturity date, the Company shall pay interest thereon at a rate of 18% per annum
(or such lesser maximum amount that is permitted to be paid by applicable law) to the Investors, accruing daily from the date such
partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In addition, because the Company
was unable to have a registration statement declared effective pursuant to the terms of the Registration Rights Agreements dated
as of November 26, 2013, the Company was in default under such Registration Rights Agreements (the &ldquo;Effectiveness Default
Damages&rdquo;). Pursuant to the Registration Rights Agreement, the Effectiveness Default Damages mandated that the interest rate
due under the Note corresponding to such Registration Rights Agreement will increase 2% above the then effective interest rate
of such Note, and shall continue to increase by 2% every 30 days until a registration statement is declared effective.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company&rsquo;s registration
statement covering its common stock, into which the Notes may be converted, was first filed on August 1, 2014, and was declared
effective by the SEC on October 22, 2014. The Filing Default Damages stopped accruing on the date such registration statement was
filed, and the Effectiveness Default Damages stopped accruing on the date it was declared effective.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">On December 11, 2014, the Company sent a letter to the Investors
holding Notes dated November 26, 2013 (the &ldquo;2013 Investors&rdquo;) concerning the first interest payment that was scheduled
to be paid pursuant to the Notes dated November 26, 2013 on the one year anniversary of the date that each 2013 Investor submitted
payment for their Note (the &ldquo;First Interest Payments&rdquo;). The Company invited the 2013 Investors to convert the First
Interest Payments into shares of the Company&rsquo;s common stock to further this purpose. The Company also asked each 2013 Investor
to execute an Agreement and Waiver (the &ldquo;Agreement and Waiver&rdquo;), which granted the Company a grace period, deferring
the Company&rsquo;s obligation to make payment of the First Interest Payment and interest that was due under the Note through
November 26, 2014 (the &ldquo;Interest Due&rdquo;) until February 24, 2015 (the &ldquo;Extension&rdquo;), during which time such
deferment would not be considered an Event of Default under the 2013 Investor&rsquo;s Note. In connection with the Extension,
subsequent quarterly payments of interest will be determined based on the issuance date of each Note (i.e., November 26, 2013)
rather than the date that each 2013 Investor first submitted payment for their Note, the sole purpose and impact of this change
being to reduce ongoing costs to administer the Notes. In return for granting the Extension, the Company offered to capitalize
the Interest Due at a rate of 12% (the &ldquo;Additional Interest&rdquo;), which was convertible into shares of the Company&rsquo;s
common stock at the conversion price of $0.25 per share as of February 24, 2014, unless the 2013 Investor requested to receive
the Additional Interest in cash 15 days prior to the end of the Extension.</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">On January 23, 2015, the Company
sent a letter agreement to the Investors holding Notes dated November 26, 2013 and May 8, 2014, which constituted all Investors
with Filing Default Damages or Effectiveness Default Damages due to them pursuant to the Registration Rights Agreements dated as
of November 26, 2013 or May 8, 2014 (the &ldquo;Agreement to Convert&rdquo;). The Company invited the Investors, as applicable,
to elect to convert the Interest Due and/or the Filing Default Damages and Effectiveness Default Damages into shares of the Company&rsquo;s
common stock at a price of $0.25 per share, and asked each Investor, as applicable, to make such election by acknowledging and
returning the Agreement to Convert to the Company.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In connection with the Agreement
and Waiver and Agreement to Convert, we issued 1,718,585 shares representing $429,646 in Additional Interest, Interest Due, Filing
Default Damages and Effectiveness Default Damages during the nine-months ended September 30, 2015.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;<B>(B) Terms</B>
<B>of Debt</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The debt carries interest between 12%
and 15%, and is due in November 2015, May 2016 and June 2016.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">All convertible debt and related warrants
issued in connection with the Notes Offering are convertible at $0.25 and $0.375/share, respectively; however, given the existence
of a &ldquo;ratchet feature&rdquo;, which allows for a lower offering price if the Company offers shares to the public at a lower
price.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(C)</B> <B>Future Commitments</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">At September 30, 2015 the Company
has outstanding convertible debt of $3,560,251 which is payable within the next twelve months.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 8 Derivative Liabilities</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company identified conversion features
embedded within convertible debt and warrants issued in 2013. The Company has determined that the features associated with the
embedded conversion option, in the form a ratchet provision, should be accounted for at fair value, as a derivative liability,
as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">As a result of the application of ASC
No. 815, the fair value of the ratchet feature related to convertible debt and warrants is summarized as follow:&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%; text-align: left; padding-left: 5.4pt">&nbsp;Fair value at the commitment date - convertible debt</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">4,892,234</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">4,892,234</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Fair value at the commitment date - warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">677,214</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">677,214</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Reclassification of derivative liabilities to additional paid in capital related to warrants exercised that ceased being a&nbsp;&nbsp;derivative liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(214,769</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(214,769</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Fair value mark to market adjustment - stock options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25,614</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25,614</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Fair value mark to market adjustment - convertible debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,780,996</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(663,602</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;Fair value mark to market adjustment - warrants</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(123,447</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(13,701</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;Totals</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">12,009,481</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,651,762</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The fair value at the commitment and re-measurement dates
for the Company&rsquo;s derivative liabilities were based upon the following management assumptions as September 30, 2015:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Commitment Date</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Re-measurement Date</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 60%; text-align: left">&nbsp;Expected dividends</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: center; vertical-align: bottom">0%</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: center; vertical-align: bottom">0%</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;Expected volatility</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">150%</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">150%</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;Expected term</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;2 - 5 years&nbsp;</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;0.16 &ndash; 3.74 years&nbsp;</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;Risk free interest rate</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;0.29% - 1.68%&nbsp;</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;0.64% - 1.37%&nbsp;</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 9 Debt Discount</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company recorded the debt discount
to the extent of the gross proceeds raised, and expensed immediately the remaining fair value of the derivative liability, as it
exceeded the gross proceeds of the note.&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company recorded a derivative expense
of $0 and $0 for the three-months ended September 30, 2015 and 2014 respectively and $0 and $568,485 for the nine-months ended
September 30, 2015 and 2014.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Accumulated amortization of derivative
discount amounted to $953,982 as of September 30, 2015 and $2,575,239 for the year ended December 31, 2014.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 10 Debt Issue Costs</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 78%; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Balance- December 31, 2013</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 16%; text-align: right">247,197</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Additions</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Amortization</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(154,851</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Balance- December 31, 2014</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">161,946</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Amortization</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(117,098</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Balance- September 30, 2015</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">44,848</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company recorded amortization expense
of $39,441 and $39,479 for the three-months ended September 30, 2015 and 2014 respectively and $117,098 and $103,388 for the nine-months
ended September 30, 2015 and 2014, respectively. Accumulated amortization of debt issuance costs amounted to $271,949 and $154,851
at September 30, 2015 and December 31, 2014 respectively.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="7" STYLE="text-align: left; vertical-align: bottom">Remaining in the following years ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 43%; text-align: right">2015</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 43%; text-align: right">38,649</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">2016</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,199</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">44,848</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 11 GE Royalty Obligation</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In 2011, the Company executed a Trademark
Licensing Agreement with General Electric, which allows the Company the right to market certain ceiling light and fan fixtures
displaying the GE brand. The License Agreement imposes certain manufacturing and quality control conditions that the Company must
maintain in order to continue to use the GE brand.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The License Agreement is non-transferable
and cannot be sub-licensed. Various termination clauses are applicable, however, none were applicable as of December 31, 2014 and
2013.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In August 2014, the Company entered
into a second amendment to the License Agreement pertaining to its royalty obligations. Under the terms of the amendment, the Company
agreed to pay a total of $12,000,000 by November 2018 for the rights assigned in the original contract. In case the Company does
not pay GE a total of at least $12,000,000 in cumulative royalties over the term of the License Agreement, the difference between
$12,000,000 and the amount of royalties paid to GE is owed in December 2018.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Payments are due quarterly based upon
the prior quarters&rsquo; sales. The Company has made payments of $22,705 for the three-months and $178,043 for the nine-months
ended September 30, 2015, respectively.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The License Agreement obligation will
be paid from sales of GE branded product subject to the following repayment schedule:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P><P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Net Sales in Contract Year</B></P></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Percentage of the Contract Year Net Sales owed to GE</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 43%; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">0 - $50,000,000</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 24%; text-align: right">7</TD><TD STYLE="width: 20%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">50,000,001 - $100,000,000</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: left; vertical-align: bottom">100,000,001+</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company has limited operating history
and does not have the ability to estimate the sales of GE branded product, the liability is classified as long-term. As sales are
recognized, the Company will estimate the portion it expects to pay in the current year and classify as current.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 12 Stockholders Deficit</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(A) Common</B> <B>Stock</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">For the nine-months ended September
30, 2015 and the year ended December, 31 2014, the Company issued the following common stock:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Transaction Type</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; padding-bottom: 1pt"></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Quantity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Valuation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Range of Value per Share</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>December 31, 2014</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left; padding-left: 10pt">Common stock issued in exercise of warrants</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: center">(1)</TD><TD STYLE="width: 1%; text-align: left"></TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">1,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">0.001</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt; text-indent: 0pt">Common stock issued per mutual release and waiver</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">(2)</TD><TD STYLE="padding-bottom: 1pt; text-align: left"></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">250,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">62,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.25</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,250,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">63,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">.001-0.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0">September 30, 2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt">Common stock issued per Agreement and Waiver and Agreement to Convert</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">(3)</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,718,585</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">429,646</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt">Common stock issued per Employment Agreement of CEO</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">(4)</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">250,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Common stock issued per Stock Offering</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">(5)</TD><TD STYLE="padding-bottom: 1pt; text-align: left"></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,349,333</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,009,600</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.60</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">5,317,918</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,501,746</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.25-0.60</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The following is a more detailed description
of the Company&rsquo;s stock issuance from the table above:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(1)</B> <B>Warrants Exercised for Cash</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In connection with a warrant exercise,
a third party paid cash to obtain these shares.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(2) Services Rendered - Related Party</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In November 2014, the Company issued
750,000 of restricted, non-vested shares to new Chief Executive Officer. The shares vest as follows: 250,000 in May 2015 and 500,000
shares in December 2015. The shares are valued at $0.25 per share.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company&rsquo;s former Chief Executive
Officer received 1,250,000 restricted unvested shares in association with an employment contract. These restricted shares were
to vest as follows: 500,000 on November 15, 2013 with the remaining 750,000 shares to vest evenly (250,000 shares each vesting
period) on December 31, 2014, 2015 and 2016. The shares were valued based on a third party cash offering of convertible debt containing
an exercise price of $0.25/share. In November 2014, the agreement was terminated and the Company entered into a new Agreement and
Mutual Release with that former CEO. As of that date (November 2014), 500,000 of the aforementioned 1,250,000 shares were fully
vested. In accordance with this new Agreement, the Company issued 250,000 shares that vested on December 31, 2014 and the executive
retained 500,000 shares of the previous granted (fully vested) shares. The remaining 500,000 unvested shares were forfeited by
the former CEO.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(3)</B> <B>Agreement and Waiver and Agreement to Convert</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The Company issued 1,718,585 shares
at $0.25 per share, representing $429,646 in penalties and interest, in connection with the Agreement and Waiver and the Agreement
to Convert. For a complete description of the Agreement and Waiver and the Agreement to Convert, see Note 7 above.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(4)</B> <B>Shares Issued to Chief Executive Officer </B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In accordance with the Employment Agreement
Executed with the Company&rsquo;s Chief Executive Officer, 250,000 shares of Restricted Common Stock vested in May, 2015. These
shares were issued at $0.25 per share.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(5)</B> <B>Shares Issued in Connection
with Stock Offering</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In May 2015, the Company offered to
existing shareholders a maximum of 6,666,667 shares of common stock at an issuance cost of $0.60 per share for a total of $4,000,000
(the &ldquo;Stock Offering&rdquo;). The Stock Offering concluded on November 6, 2015. The Company issued 3,349,333 shares under
this offering through September 30, 2015.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(B) Additional</B> <B>Paid in Capital and Other Equity
Transactions</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The following transactions occurred during the period:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(1) Derivative Liability</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Reclassification of derivative liability
associated with warrants of $201,965 for the nine-months ended September 30, 2015 and $214,769 for the year ended December 31,
2014.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(2) Services Rendered &ndash; Related Parties</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Common stock issued for services &ndash; related party of
$76,312 for the year ended December 31, 2014.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(C) Stock Options</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The following is a summary of the Company&rsquo;s stock
option activity:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">Weighted Average Remaining</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">Aggregate</TD></TR>
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">Weighted Average</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"> Contractual Life</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">Intrinsic</TD></TR>
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD COLSPAN="3">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Options</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Exercise Price</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">(In Years)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Value</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 24%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Balance - December 31, 2013
                                                       - outstanding</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 16%; text-align: right">300,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 16%; text-align: right">0.375</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">4.67</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Exercised</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Granted</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Forfeited/Cancelled</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Balance- December 31, 2014</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.375</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.67</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Exercised</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Granted</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Forfeited/Cancelled</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Balance- September 30, 2015</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">200,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.375</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.93</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">Of the total options granted, 100,000
were cancelled in February 2014 as a Board Director resigned.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(D) Stock Warrants</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">All warrants issued during the nine-months
ended September 30, 2015 and the year ended December 31, 2014 were accounted for as derivative liabilities as the warrants contained
a ratchet feature. See Note 8.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">During 2014, the Company issued 5,390,100
warrants. The warrants granted expire 5 years from issuance on various dates during 2019.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">During 2014, of the total warrants granted
4,740,100 granted to third parties, while 650,000 were granted to related parties, consisting of the Company&rsquo;s former Chief
Executive Officer.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">During 2014, the Company issued secured
convertible notes in connection with the Notes Offering. As part of the Notes Offering, the Company issued Warrants to purchase
5,390,100 shares of common stock in 2014. The warrants vest immediately and expire on various dates in 2019, with an exercise price
of $0.375 per share.&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<!-- Field: Page; Sequence: 83 -->
    <DIV STYLE="margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#TableOfContents" STYLE="font-weight: bold; font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The following is a summary of the Company&rsquo;s
warrant activity:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD COLSPAN="3">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Number of Warrants</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Weighted Average Exercise Price</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Weighted Average Remaining Contractual Life (in Years)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 20%; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Balance, December 31, 2013</B></FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 19%; text-align: right">4,338,884</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 19%; text-align: right">0.242</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 19%; text-align: right">4.9</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Granted </B></FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,390,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.375</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Exercised</B></FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Cancelled/Forfeited</B></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Balance, December 31, 2014</B></FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,728,984</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.375</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.4</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Exercised</B></FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Cancelled/Forfeited</B></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Balance, December 31, 2014</B></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9,728,984</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.375</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3.9</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Exercised</B></FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Cancelled/Forfeited</B></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Balance, September 30, 2015</B></FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,728,984</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.375</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.93</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">During 2014, the Company received $1,000
in connection with the exercise of a warrant to purchase 1,000,000 shares of the Company&rsquo;s common stock. The warrants had
been assigned from the exercising investor from another investor, who originally held warrants exercisable into 2,400,000 shares
of the Company&rsquo;s common stock and exercised warrants into 1,400,000 shares of the Company&rsquo;s common stock during 2013.
There is was no additional compensation expense recorded on this transaction.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B><U>Note 13 Commitments</U></B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"><B>(A) Operating Lease</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In January 2014, the Company executed
a 39 month lease for a corporate headquarters. The Company paid a security deposit of $27,020.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In October, 2014, the Company executed
a 53 month lease for a new corporate headquarters with a base rent of $97,266 escalating annually through 2019. The Company paid
a security deposit of $1,914.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">In October, 2014, the Company entered
into a sublease agreement to sublease its previous office space through March 2017.&nbsp; In connection with the sublease, the
Company collected $34,981 as a security deposit.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The minimum rent obligations are approximately
as follows:</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">Minimum</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">Sublease</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">Net</TD></TR>
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Obligation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Rentals</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Obligation</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 20%; text-align: center; vertical-align: top">2015</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 19%; text-align: right">26,813</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 19%; text-align: right">21,199</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 19%; text-align: right">5,614</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">2016</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">109,592</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">86,688</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,903</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">2017</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,961</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,263</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,698</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">2018</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,154</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,154</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">2019</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,615</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,615</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: center; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Total</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">221,135</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">130,150</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">90,984</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<!-- Field: Page; Sequence: 84 -->
    <DIV STYLE="margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#TableOfContents" STYLE="font-weight: bold; font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->24<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>(B) Employment</B> <B>Agreement &ndash; Chief Executive
Officer</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2014, the Company
entered into an employment agreement with its new Chief Executive Officer. In addition to salary, the agreement provided for
the issuance of 750,000 restricted shares to him, vesting as follows: 250,000 after the first 6 months of employment and
500,000 additional shares at December 31, 2015. Under terms of the agreement the executive would receive additional
compensation in the form of stock options to purchase shares of Company stock equal to one half of one percent (0.5%) of
quarterly net income. The strike price of the options will be established at the time of the grant. The options will vest in
twelve months and expire after sixty months. In addition to the stock options compensation, the executive will receive cash
compensation equal to one half of one percent (0.5%) of annual sales up to $20 million and one quarter of one percent (0.25%)
for annual sales $20 million and 3% of annual net income. For the nine-months ended September, 2015, approximately $12,500
has been accrued under this agreement in cash compensation.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2014, the agreement with
the former CEO was terminated by mutual agreement upon the Company&rsquo;s execution of an Agreement and Mutual Release and Waiver
with the former CEO. The agreement allowed for immediate vesting of 750,000 shares of the original 1,250,000 unvested shares previously
granted to the former CEO. In addition, the Company agreed to pay the executive one half of one percent (0.5%) of sales associated
with one selected customer, occurring for up to 36 months.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>(C)</B> <B>Consulting Agreement</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has a 3 year consulting
agreement with a director which expires in November 2016, and carries an annual payment of $150,000 cash, stock or 5 year options
equal to one half of one percent (0.5%) of the Company&rsquo;s annual net sales. For the nine-months ended approximately $12,500
has been accrued as cash compensation, and no stock has been issued.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><U>Note 14 Going Concern</U></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">As reflected in the accompanying financial
statements, the Company had a net loss of $(13,086,489) and net cash used in operations of $(2,865,936) for the nine-months ended
September 30, 2015; and a working capital deficit and stockholders&rsquo; deficit of $(15,493,415) at September 30, 2015. These
factors raise substantial doubt about the Company's ability to continue as a going concern.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The ability of the Company to continue
its operations is dependent on management's plans, which include the raising of capital through debt and/or equity markets with
some additional funding from other traditional financing sources, including convertible debt and/or other term notes, until such
time that funds provided by operations are sufficient to fund working capital requirements.&nbsp;&nbsp;The Company may need to
incur liabilities with certain related parties to sustain the Company&rsquo;s existence.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company may require additional funding
to finance the growth of its current and expected future operations as well as to achieve its strategic objectives.&nbsp;&nbsp;The
Company&rsquo;s currently available cash along with anticipated revenues may not be sufficient to meet its cash needs for the near
future.&nbsp;&nbsp;There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if
at all.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying financial statements
have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business.&nbsp;&nbsp;These financial statements do not include any adjustments relating to the recovery of
the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as
a going concern.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B><U>Note 15 Subsequent Events</U></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 6, 2015, the Company
completed its remaining tranche and final closing of its Stock Offering, resulting in gross proceeds to the Company
of $260,000 and the issuance of 433,333 shares of the Company&rsquo;s common stock.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="margin: 0; text-align: justify">On November 15, 2015, the Company&rsquo;s
Board of Directors authorized the Company to grant certain securities &nbsp;under the Company&rsquo;s 2015 Stock Incentive Plan,
in the aggregate amount of 3,990,000 options to purchase shares of our common stock, vesting in part immediately and entirely
over the next two years, and 75,000 shares of our common stock, vesting immediately.&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">SAFETY QUICK LIGHTING &amp; FAN CORP AND
SUBSIDIARY</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">CONSOLIDATED FINANCIALS STATEMENTS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">FOR THE YEARS ENDED DECEMBER 31, 2014
AND 2013</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P><P STYLE="font-family: Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center; font-weight: bold"><B><U>Index to Consolidated Financial Statements</U></B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center; font-weight: bold">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-weight: bold">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: justify">Pages</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 90%; text-align: justify">Report of Independent Registered Public Accounting Firm</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: justify">F-28</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">Consolidated Balance Sheets &ndash; December 31, 2014 and 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">F-29</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">Consolidated Statements of Comprehensive Income &ndash; December 31, 2014 and 2013 <BR></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">F-30</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD></TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">Consolidated Statement of Stockholder&rsquo;s Deficit &ndash; December 31, 2014 and 2013 <BR></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">F-31</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">Consolidated Statements of Cash Flows &ndash; December 31, 2014 and 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">F-34</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">Notes to Consolidated Financial Statements</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">F-36</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><IMG SRC="image_003.jpg" ALT="" STYLE="height: 70px; width: 587px"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: right">7951 SW 6th St., Suite. 216</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: right">Plantation, FL 33324</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: right">Tel: 954-424-2345</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: right">Fax: 954-424-2230</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">To the Board of Directors and Shareholders
of</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Safety Quick Lighting &amp; Fans Corp. and
Subsidiary</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">We have audited the accompanying consolidated
balance sheets of Safety Quick Lighting &amp; Fans Corp. and Subsidiary (&ldquo;the Company&rdquo;) as of December 31, 2014 and
2013 and the related consolidated statements of operations, stockholders&rsquo; deficit, and consolidated cash flows for the years
ended December 31, 2014 and 2013. These consolidated financial statements are the responsibility of the Company&rsquo;s management.
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">We conducted our audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&rsquo;s internal control
over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of
December 31, 2014 and 2013, and the results of its operations, changes in stockholders&rsquo; deficit and cash flows for the years
ended December 31, 2014 and 2013 in conformity with accounting principles generally accepted in the United States of America.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying consolidated financial
statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 14 to the consolidated
financial statements, the Company has insufficient working capital, a stockholders&rsquo; deficit and recurring net losses, which
raises substantial doubt about its ability to continue as a going concern. Management&rsquo;s plans regarding those matters also
are described in Note 14. The consolidated financial statements do not include any adjustments that might result from the outcome
of this uncertainty.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">/s/ Bongiovanni &amp; Associates, PA</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Bongiovanni &amp; Associates, PA</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Certified Public Accountants</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Plantation, Florida</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The United States of America</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">March 31, 2015</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: right"><U>www.ba.cpa.net</U></P>


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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Safety Quick Lighting &amp; Fans
    Corp. and Subsidiary</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Consolidated Balance Sheets</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">December
    31, 2014 and 2013</TD></TR>
<TR STYLE="text-align: center; vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-left: 5.75pt">Assets</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.75pt">Current assets:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Cash and cash equivalents</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">1,241,487</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">1,132,974</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Prepaid expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">29,641</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">40,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; text-indent: 10pt; padding-left: 5.75pt">Other</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 20.1pt; padding-left: 5.75pt; font-weight: bold">Total current
    assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,271,128</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,172,974</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.75pt">Furniture and Equipment - net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">132,609</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,046</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.75pt">Other assets:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Patent - net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">46,419</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">24,697</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Debt issue costs &ndash; net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">161,946</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">235,211</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">GE trademark license &ndash; net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,565,217</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 10pt; padding-left: 5.75pt">Other assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">65,714</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 20.1pt; padding-left: 5.75pt; font-weight: bold">Total other assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,839,296</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">259,908</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; padding-left: 5.75pt; font-weight: bold">Total assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">11,243,034</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,438,928</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.75pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-left: 5.75pt">Liabilities and Stockholders (Deficit)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.75pt">Current liabilities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Accounts payable &amp; accrued expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">1,041,741</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">107,380</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Convertible debt &ndash; net of $970,150
    debt discount</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,223,982</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Convertible debt &ndash; related parties
    &ndash; net of $23,001 debt discount</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">26,999</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Notes payable - third party</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">98,086</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">98,086</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Notes payable - related party</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">26,108</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Derivative liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,651,762</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,751,504</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 10pt; padding-left: 5.75pt">Other current
    liabilities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">78,622</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 20.1pt; padding-left: 5.75pt; font-weight: bold">Total current
    liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,121,192</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,983,078</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.75pt">Long term liabilities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Convertible debt - net of $1,582,087
    debt discount</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">688,013</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">361,245</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Convertible debt - related parties
    - net of debt discount</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">50,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 10pt; padding-left: 5.75pt">Notes payable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">307,009</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">405,117</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 10pt; padding-left: 5.75pt">GE royalty obligation</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">12,000,000</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 20.1pt; padding-left: 5.75pt; font-weight: bold">Total long term
    liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,995,022</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">816,362</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 5.75pt; font-weight: bold">Total liabilities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">20,116,214</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,799,440</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.75pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.75pt; font-weight: bold">Stockholders' deficit:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0pt; padding-left: 20pt">Preferred stock: $0 par value, 20,000,000
    shares authorized; 0 shares issued and outstanding</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0pt; padding-left: 20pt">Common stock: $0 par value, 500,000,000
    shares authorized; 35,750,000 and 34,500,000 shares issued and outstanding at December 31, 2014 and 2013, respectively</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">127,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">126,400</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0pt; padding-left: 20pt">Additional paid-in capital</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,359,127</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,068,045</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: 20pt">Accumulated deficit</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(15,324,264</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(8,519,517</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0pt; padding-left: 30pt">Total Stockholders' deficit</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(8,837,737</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(2,325,072</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: 20pt">Noncontrolling interest</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(35,442</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(35,440</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: 30pt; font-weight: bold">Total
    Deficit</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(8,873,179</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(2,360,512</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0pt; padding-left: 30pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 40pt; font-weight: bold">Total
    liabilities and stockholders' deficit</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">11,243,034</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,438,928</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>





<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="17" STYLE="font-weight: bold; text-align: center">&nbsp;<B>Safety Quick Lighting &amp; Fans Corp. and Subsidiary</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="17" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Consolidated Statements of
    Comprehensive Income</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="text-align: center; vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 72%; font-weight: bold; text-align: left; padding-left: 5.4pt">General and administrative expenses</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">4,799,696</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">1,401,435</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Loss from operations</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,799,696</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,401,435</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 5.4pt">Other income (expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,139,485</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(171,590</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Derivative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(568,485</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,156,262</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Change in fair value of embedded derivative liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">702,917</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,250</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Loss on debt extinguishment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,731</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Gain on debt forgiveness</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Total other expense - net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,005,053</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,206,333</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Net loss including noncontrolling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,804,749</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,607,768</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Less: net loss attributable to noncontrolling interest</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(34,433</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Net loss attributable to Safety Quick Lighting &amp;
    Fans Corp.</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(6,804,747</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,573,335</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Net loss per share - basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.20</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.08</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Weighted average number of common shares outstanding
    during the year - basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">33,644,359</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">32,128,444</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="33" STYLE="font-weight: bold; text-align: center">Safety Quick Lighting &amp; Fans Corp. and Subsidiary</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="33" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Consolidated Statement of Stockholders'
    Deficit</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="33">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 12pt">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center">Preferred Stock</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center">Common Stock,</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Additional</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Non</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">$0 Par Value</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">$0 Par Value</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">Paid-</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">Accumulated</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">Controlling</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">Stockholders&rsquo;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">in Capital</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Deficit</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Interest</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Deficit</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; font-weight: bold; padding-left: 5.4pt">Balances, December 31, 2011</TD><TD STYLE="width: 2%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font-weight: bold; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">31,133,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">4,294,675</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">(5,101,600</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">(806,925</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Sale of 4.5% interest in subsidiary</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">768,807</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,193</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">774,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Imputed interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,385</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,385</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Net loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(844,582</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(25,738</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(870,320</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-left: 5.4pt">Balances, December 31, 2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,133,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,066,867</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,946,182</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20,545</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(899,860</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Debt forgiveness - related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">83,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">83,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Reclassification of derivative liability associated with warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">311,709</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">311,709</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Loss on debt extinguishment - related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,278</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,278</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Exercise of stock warrants for cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,400,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Common stock issued for services - related party - ($0.25/share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">125,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">125,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Issuance of shares to reacquire 4.5% ownership in subsidiary-($0.25/share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,467,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(19,538</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,538</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="33" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;<B>Safety
    Quick Lighting &amp; Fans Corp. and Subsidiary</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="33" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Consolidated
    Statement of Stockholders' Deficit (Continued)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="33" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 12pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>Preferred Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>Common Stock, $0 Par </B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>Additional</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>Non</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>Total</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: black 1pt solid; text-align: center"><B>$0 Par Value</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: black 1pt solid; text-align: center"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>Paid-</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>Accumulated</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>Controlling</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>Stockholders&rsquo;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center"><B>in Capital</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center"><B>Deficit</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center"><B>Interest</B></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center"><B>Deficit </B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="width: 10%; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 4%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 12%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 5.4pt">Common stock transferred from existing stockholders for services rendered - ($0.25/share)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">562,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">562,500</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 5.4pt">Stock options issued for services - related parties</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">66,785</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">66,785</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt">Net loss</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">(2,573,335</TD>
    <TD STYLE="padding-bottom: 1pt">)</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">(34,433</TD>
    <TD STYLE="padding-bottom: 1pt">)</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">(2,607,768</TD>
    <TD STYLE="padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><B>Balances, December 31, 2013</B></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right"><B>&mdash;&nbsp;&nbsp;</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right"><B>&mdash;&nbsp;&nbsp;</B></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right"><B>34,500,000</B></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right"><B>126,400</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right"><B>6,068,045</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right"><B>(8,519,517</B></TD>
    <TD STYLE="padding-bottom: 2.5pt"><B>)</B></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right"><B>(35,440</B></TD>
    <TD STYLE="padding-bottom: 2.5pt"><B>)</B></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right"><B>(2,360,512</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-bottom: 2.5pt"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 5.4pt">Payment for exercise of options from Grannus Financial &ndash; for 1,000,000 shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">1,000&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">1,000</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 5.4pt">Reclassification of derivative liability associated with warrants</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">214,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">214,769</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 5.4pt">Common stock issued per mutual release and waiver ($0.25 /share)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">250,000&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">62,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">62,500</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><P STYLE="margin-top: 0; margin-bottom: 0">Unvested share issued for
                                         services &ndash; related party ($0.25 /share)</P></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">13,812&nbsp;&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right">13,812</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center">Preferred Stock</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center">Common Stock,</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Additional</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Non</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">$0 Par Value</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">$0 Par Value</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">Paid-</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">Accumulated</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">Controlling</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">Stockholders&rsquo;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">in Capital</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Deficit</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Interest</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Deficit</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Net loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,804,747</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,804,749</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 2.5pt; padding-left: 5.4pt">Balances, December 31, 2014</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">35,750,000</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">127,400</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">6,359,127</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(15,324,264</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(35,442</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(8,873,179</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<!-- Field: Page; Sequence: 93 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#TableOfContents" STYLE="font-weight: bold; font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->33<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: bold 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;Safety
                                         Quick Lighting &amp; Fans Corp. and Subsidiary</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Consolidated
    Statements of Cash Flows</B></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; text-align: left; padding-left: 5.4pt">Net loss attributable to Safety Quick Lighting &amp; Fans Corp.</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(6,804,747</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(2,573,335</TD><TD STYLE="width: 1%; text-align: left">)</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Net loss attributable to noncontrolling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(34,433</TD><TD STYLE="text-align: left">)</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Adjustments to reconcile net loss to net cash used in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Depreciation expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,253</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">262</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Amortization of debt issue costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">142,867</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,986</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Amortization of debt discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,507,108</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92,304</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">Amortization of patent</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,002</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,457</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Amortization of GE trademark license</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,434,783</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Change in fair value of derivative liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(702,917</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(34,250</TD><TD STYLE="text-align: left">)</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Derivative expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">568,751</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,156,262</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Loss on debt extinguishment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,731</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Gain on debt forgiveness</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,451</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(100,000</TD><TD STYLE="text-align: left">)</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Common stock transferred from existing stockholders for services rendered</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">562,500</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Stock issued for services - related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">76,312</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">125,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Stock options issued for services - related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66,785</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Change in operating assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,359</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(40,000</TD><TD STYLE="text-align: left">)</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Deferred royalty</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,000,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Royalty payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">Other</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,908</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,500</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Accounts payable &amp; accrued expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">910,641</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">63,502</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Net cash used in operating activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,800,231</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(685,729</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Cash flows from investing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Purchase of property &amp; equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(143,816</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,013</TD><TD STYLE="text-align: left">)</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Payment of patent costs</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(24,724</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Net cash used in investing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(168,540</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(6,013</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Direct issue costs paid</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(69,600</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(247,197</TD><TD STYLE="text-align: left">)</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Proceeds from issuance of convertible notes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,270,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Proceeds from note payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">160,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Proceeds from note payable - related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">61,655</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
</TABLE>



<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<!-- Field: Page; Sequence: 94 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="margin-top: 0; margin-bottom: 0; text-align: center; font-weight: bold"><B>Safety Quick Lighting &amp; Fans Corp.
    and Subsidiary</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Consolidated
    Statements of Cash Flows (Continued)</B></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%; padding-left: 5.4pt">Repayments of notes</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">(98,108</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">(116,331</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Repayments of notes - related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,108</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(35,547</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Proceeds from the exercise of warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Proceeds from issuance of stock</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Net cash provided by financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,077,284</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,823,980</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Increase cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">108,513</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,132,238</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Cash and cash equivalents at beginning of year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,132,974</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">736</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Cash and cash equivalents at end of year</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,241,487</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,132,974</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Supplementary disclosure of non-cash financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Conversion of note payable and accrued interest to
    convertible note</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">244,133</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Debt forgiveness - related parties</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">83,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Debt discount recorded on convertible debt accounted
    for as a derivative liability</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,249,458</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,925,191</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Reclassification of derivative liability to additional
    paid-in-capital</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">214,769</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">311,709</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Loss on debt extinguishment - related party</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3,278</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Reacquired 4.5% subsidiary ownership</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,538</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Supplementary disclosure of cash flow information</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Cash paid during the year for:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt">Interest</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">41,487</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">27,669</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Income taxes</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>




<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline"><B>&nbsp;</B>Note
1 Organization and Nature of Operations</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Safety Quick Lighting &amp; Fans Corp. (the
&ldquo;Company&rdquo;), a Florida corporation, was originally organized in May 2004 as a limited liability company under the name
of Safety Quick Light, LLC (&ldquo;SQL-LLC&rdquo;). The Company was converted to corporation on November 6, 2012. The Company
holds a number of worldwide patents, and has received a variety of final electrical code approvals, including UL-Listing and CSA
approval (for the United States and Canadian Markets), and CE (for the European market). The Company maintains an office in Foshan,
Peoples Republic of China with three staff of quality control engineers.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company&rsquo;s patented product is
a quick-connect, Power-Plug device (that is certified to hold up to 50 pounds) used in light fixtures and ceiling fans. The two-part
device consists of a female receptacle which installs into all junction boxes, and a male plug which is pre-installed in the lighting
fixtures and ceiling fans. The connection device allows for safe, quick and easy installation of a light fixture and ceiling fan,
similar to Plugging-In a table lamp into a wall outlet and eliminating the need to deal with or touch electrical wires.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company markets consumer friendly, energy
saving &ldquo;Plug-In&rdquo; ceiling fans and light fixtures under the GE brand as well as &lsquo;conventional&rsquo; ceiling
lights and fans carrying the GE brand. The Company also owns 98.8% of SQL Lighting &amp; Fans LLC (the &ldquo;Subsidiary&rdquo;).
The Subsidiary was incorporated in Florida on April 27, 2011 and is in the business of manufacturing the patented device that
the Company owns. The subsidiary had no activity in 2014.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company&rsquo;s fiscal year end is December
31.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
2 Summary of Significant Accounting Policies</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Basis of Presentation
</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying consolidated financial
statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States
of America (U.S. GAAP) under the accrual basis of accounting.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Use of Estimates</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements
in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Such estimates and assumptions impact both
assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful
lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share
based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates
of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Making estimates requires management to
exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or
set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate
could change in the near term due to one or more future non-conforming events. Accordingly, actual results could differ significantly
from estimates.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Risks and Uncertainties</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company&rsquo;s operations are subject
to risk and uncertainties including financial, operational, regulatory and other risks including the potential risk of business
failure.&nbsp;&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has experienced, and in the
future expects to continue to experience, variability in its sales and earnings.&nbsp;&nbsp;The factors expected to contribute
to this variability include, among others, (i) the uncertainty associated with the commercialization and ultimate success of the
product, (ii) competition inherent at large national retail chains where product is expected to be sold (iii) general economic
conditions and (iv)&nbsp;the related volatility of prices pertaining to the cost of sales.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Principles of Consolidation</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements include
the accounts of Safety Quick Lighting &amp; Fans Corp and its subsidiary, SQL Lighting &amp; Fans LLC. All inter-company accounts
and transactions have been eliminated in consolidation.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Non-Controlling Interest</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2012, in connection with the sale
of the Company&rsquo;s member units in the Subsidiary, the Company&rsquo;s ownership percentage decreased from 98.8% to 94.35%.
The Company then reacquired these member units in June 2013 increasing the ownership percentage from 94.35% back to 98.8%. During
2014, there was no activity in the subsidiary. Its pro rata share of the 2014 loss from operations is recognized in the financial
statements.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Cash and Cash Equivalents</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Cash and cash equivalents are carried at
cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments
with an original maturity of three months or less. The Company had $1,201,813 and $ -0- in money market as of December 31, 2014
and 2013, respectively.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Accounts Receivable and
Allowance for Doubtful Accounts</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts receivable are recorded at the
invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business
but mitigates the associated risks by performing credit checks and actively pursuing past due accounts.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes an allowance for
losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on
an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment
of specific identifiable customer accounts considered at risk or uncollectible.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2014 and 2013, the Company
had no accounts receivable.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The net balance of accounts receivable for
years ending December 2014 and 2013 were as follows</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 46%; text-align: left; padding-left: 5.4pt">&nbsp;Accounts Receivable</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;Allowance for Doubtful Accounts</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;Net Accounts Receivable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD>
    </TR>
</TABLE>


<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">For the years ended 2014 and 2013, the Company
recorded bad debt expense of $0 and $0, respectively.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Inventory</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventory will consist of finished goods
purchased, which are valued at the lower of cost or market value, with cost being determined on the first-in, first-out method.&nbsp;&nbsp;The
Company will periodically review historical sales activity to determine potentially obsolete items and also evaluates the impact
of any anticipated changes in future demand.&nbsp;&nbsp;</P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2014 and 2013, the Company
had no inventory, and accordingly, no allowance for damaged, obsolete or unsaleable inventory.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Valuation of Long-Lived
Assets and Identifiable Intangible Assets</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company reviews for impairment of long-lived
assets and certain identifiable intangible assets whenever events or changes in circumstances indicate that the carrying amount
of any asset may not be recoverable. In the event of impairment, the asset is written down to its fair market value. The company
determined no impairment adjustment was necessary during years 2014 and 2013.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Property and Equipment</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment is stated at cost,
less accumulated depreciation and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable.&nbsp;&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Depreciation of property and equipment is
provided utilizing the straight-line method over the estimated useful lives, ranging from 5-7 years of the respective assets.
Expenditures for maintenance and repairs are charged to expense as incurred.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Upon sale or retirement of property and
equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the
statements of operations.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Intangible Asset - Patent</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company developed a patent for an installation
device used in light fixtures and ceiling fans. Costs incurred for submitting the applications to the United States Patent and
Trademark Office for these patents have been capitalized. Patent costs are being amortized using the straight-line method over
the related 15 year lives. The Company begins amortizing patent costs once a filing receipt is received stating the patent serial
number and filing date from the Patent Office.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company incurs certain legal and related
costs in connection with patent applications. The Company capitalizes such costs to be amortized over the expected life of the
patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available
to the Company. The Company also capitalizes legal costs incurred in the defense of the Company&rsquo;s patents when it is believed
that the future economic benefit of the patent will be maintained or increased and a successful defense is probable. Capitalized
patent defense costs are amortized over the remaining expected life of the related patent. The Company&rsquo;s assessment of future
economic benefit or a successful defense of its patents involves considerable management judgment, and an unfavorable outcome
of litigation could result in a material impairment charge up to the carrying value of these assets.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">GE Trademark Licensing
Agreement</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company entered into an agreement with
General Electric on June, 2011 allowing the company to utilize the &ldquo;GE trademark&rdquo; on products which meet the stringent
manufacturing and quality requirements of General Electric. As described further in note 5 to these financial statements, the
Company and General Electric amended that agreement in August 2014. As a result of that amendment, the Company is required to
pay a minimum Trademark Licensing Fee (Royalty Obligation) to General Electric of $12,000,000. The repayment schedule is based
on a percent of sales, with any unpaid balance due in December, 2018. Under SFAS 142 &ldquo;Accounting for Certain Intangible
Assets&rdquo; the company has recorded the value of the GE Licensing Agreement and will amortize it over the life of the agreement
which is 60 months.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold"></P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Fair Value of Financial
Instruments</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company measures assets and liabilities
at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents
the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction
between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an
asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair
value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The following are the hierarchical levels
of inputs to measure fair value:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Level 1 &ndash;
                                         Observable inputs that reflect quoted market prices in active markets for identical assets
                                         or liabilities.</TD>
</TR></TABLE>


<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Level 2 - Inputs
                                         reflect quoted prices for identical assets or liabilities in markets that are not active;
                                         quoted prices for similar assets or liabilities in active markets; inputs other than
                                         quoted prices that are observable for the assets or liabilities; or inputs that are derived
                                         principally from or corroborated by observable market data by correlation or other means.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Level 3 &ndash;&nbsp;Unobservable
                                         inputs reflecting the Company&rsquo;s assumptions incorporated in valuation techniques
                                         used to determine fair value. These assumptions are required to be consistent with market
                                         participant assumptions that are reasonably available.</TD>
</TR></TABLE>




<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying amounts of the Company&rsquo;s
financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable &amp; accrued expenses,
certain notes payable and notes payable &ndash; related party, approximate their fair values because of the short maturity of
these instruments.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for its derivative
liabilities, at fair value, on a recurring basis under level 3. See Note 6.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Embedded Conversion Features</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluates embedded conversion
features within convertible debt under ASC 815 &ldquo;Derivatives and Hedging&rdquo; to determine whether the embedded conversion
feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair
value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated
under ASC 470-20 &ldquo;Debt with Conversion and Other Options&rdquo; for consideration of any beneficial conversion feature.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Derivative Financial
Instruments</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of it financial instruments, including
stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.
For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at
its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to
income.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">For option-based simple derivative financial
instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent
valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities
or as equity, is re-assessed at the end of each reporting period.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Beneficial Conversion
Feature</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">For conventional convertible debt where
the rate of conversion is below market value, the Company records a &quot;beneficial conversion feature&quot; (&quot;BCF&quot;)
and related debt discount.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">When the Company records a BCF, the relative
fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional
paid in capital) and amortized to interest expense over the life of the debt.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Debt Issue Costs and
Debt Discount</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company may record debt issue costs
and/or debt discounts in connection with raising funds through the issuance of debt.&nbsp;&nbsp;These costs may be paid in the
form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion
of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Original Issue Discount</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">For certain convertible debt issued, the
Company may provide the debt holder with an original issue discount.&nbsp;&nbsp;The original issue discount would be recorded
to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Extinguishments of Liabilities</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for extinguishments
of liabilities in accordance with ASC 860-10 (formerly SFAS 140) &ldquo;Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilities&rdquo;. When the conditions are met for extinguishment accounting, the liabilities are derecognized
and the gain or loss on the sale is recognized.</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Stock-Based Compensation
- Employees</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for its stock based
compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement
principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant
to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration
received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the
fair value of the equity instrument issued, whichever is more reliably measurable.&nbsp;&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">The measurement date used to determine the fair value of the equity
instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance
will occur.&nbsp;&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">If the Company is a newly formed corporation
or shares of the Company are thinly traded, the use of share prices established in the Company&rsquo;s most recent private placement
memorandum (based on sales to third parties) (&ldquo;PPM&rdquo;), or weekly or monthly price observations would generally be more
appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between
the bid and asked quotes and lack of consistent trading in the market.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of share options and similar
instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model.&nbsp;&nbsp;The ranges of assumptions
for inputs are as follows:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Expected term
                                         of share options and similar instruments: The expected life of options and similar instruments
                                         represents the period of time the option and/or warrant are expected to be outstanding.&nbsp;&nbsp;Pursuant
                                         to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected
                                         term of share options and similar instruments represents the period of time the options
                                         and similar instruments are expected to be outstanding taking into consideration of the
                                         contractual term of the instruments and employees&rsquo; expected exercise and post-vesting
                                         employment termination behavior into the fair value (or calculated value) of the instruments.&nbsp;&nbsp;Pursuant
                                         to paragraph 718-10-S99-1, it may be appropriate to use the&nbsp;simplified method,&nbsp;i.e.,&nbsp;expected
                                         term = ((vesting term + original contractual term) / 2), if (i) A company does not have
                                         sufficient historical exercise data to provide a reasonable basis upon which to estimate
                                         expected term due to the limited period of time its equity shares have been publicly
                                         traded; (ii) A company significantly changes the terms of its share option grants or
                                         the types of employees that receive share option grants such that its historical exercise
                                         data may no longer provide a reasonable basis upon which to estimate expected term; or
                                         (iii) A company has or expects to have significant structural changes in its business
                                         such that its historical exercise data may no longer provide a reasonable basis upon
                                         which to estimate expected term. The Company uses the simplified method to calculate
                                         expected term of share options and similar instruments as the company does not have sufficient
                                         historical exercise data to provide a reasonable basis upon which to estimate expected
                                         term.</TD>
</TR></TABLE>




<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Expected volatility
                                         of the entity&rsquo;s shares and the method used to estimate it.&nbsp;&nbsp;Pursuant
                                         to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses
                                         the calculated value method shall disclose the reasons why it is not practicable for
                                         the Company to estimate the expected volatility of its share price, the appropriate industry
                                         sector index that it has selected, the reasons for selecting that particular index, and
                                         how it has calculated historical volatility using that index.&nbsp;&nbsp;The Company
                                         uses the average historical volatility of the comparable companies over the expected
                                         contractual life of the share options or similar instruments as its expected volatility.&nbsp;&nbsp;If
                                         shares of a company are thinly traded the use of weekly or monthly price observations
                                         would generally be more appropriate than the use of daily price observations as the volatility
                                         calculation using daily observations for such shares could be artificially inflated due
                                         to a larger spread between the bid and asked quotes and lack of consistent trading in
                                         the market.</TD>
</TR></TABLE>




<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Expected annual
                                         rate of quarterly dividends.&nbsp;&nbsp;An entity that uses a method that employs different
                                         dividend rates during the contractual term shall disclose the range of expected dividends
                                         used and the weighted-average expected dividends.&nbsp;&nbsp;The expected dividend yield
                                         is based on the Company&rsquo;s current dividend yield as the best estimate of projected
                                         dividend yield for periods within the expected term of the share options and similar
                                         instruments.</TD>
</TR></TABLE>




<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Risk-free rate(s).
                                         An entity that uses a method that employs different risk-free rates shall disclose the
                                         range of risk-free rates used.&nbsp;&nbsp;The risk-free interest rate is based on the
                                         U.S. Treasury yield curve in effect at the time of grant for periods within the expected
                                         term of the share options and similar instruments.</TD>
</TR></TABLE>






<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Generally, all forms of share-based payments,
including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value
on the awards&rsquo; grant date, based on estimated number of awards that are ultimately expected to vest.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The expense resulting from share-based payments
is recorded in general and administrative expense in the statements of operations.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Stock-Based Compensation
&ndash; Non Employees</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><I><U>Equity Instruments Issued to Parties
Other Than Employees for Acquiring Goods or Services</U></I></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for equity instruments
issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting
Standards Codification (&ldquo;Sub-topic 505-50&rdquo;).</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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    <!-- Field: /Page -->

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to ASC Section 505-50-30, all transactions
in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the
fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.&nbsp;&nbsp;The
measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance
is complete or the date on which it is probable that performance will occur.&nbsp;&nbsp;If the Company is a newly formed corporation
or shares of the Company are thinly traded the use of share prices established in the Company&rsquo;s most recent private placement
memorandum (&ldquo;PPM&rdquo;), or weekly or monthly price observations would generally be more appropriate than the use of daily
price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack
of consistent trading in the market.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of share options and similar
instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model.&nbsp;&nbsp;The ranges of assumptions
for inputs are as follows:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&bull; Expected
term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification
the expected term of share options and similar instruments represents the period of time the options and similar instruments are
expected to be outstanding taking into consideration of the contractual term of the instruments and holder&rsquo;s expected exercise
behavior into the fair value (or calculated value) of the instruments.&nbsp;&nbsp;The Company uses historical data to estimate
holder&rsquo;s expected exercise behavior.&nbsp;&nbsp;If the Company is a newly formed corporation or shares of the Company are
thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options
and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which
to estimate expected term.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Expected volatility
                                         of the entity&rsquo;s shares and the method used to estimate it.&nbsp;&nbsp;Pursuant
                                         to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses
                                         the calculated value method shall disclose the reasons why it is not practicable for
                                         the Company to estimate the expected volatility of its share price, the appropriate industry
                                         sector index that it has selected, the reasons for selecting that particular index, and
                                         how it has calculated historical volatility using that index.&nbsp;&nbsp;The Company
                                         uses the average historical volatility of the comparable companies over the expected
                                         contractual life of the share options or similar instruments as its expected volatility.&nbsp;&nbsp;If
                                         shares of a company are thinly traded the use of weekly or monthly price observations
                                         would generally be more appropriate than the use of daily price observations as the volatility
                                         calculation using daily observations for such shares could be artificially inflated due
                                         to a larger spread between the bid and asked quotes and lack of consistent trading in
                                         the market.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Expected annual
                                         rate of quarterly dividends.&nbsp;&nbsp;An entity that uses a method that employs different
                                         dividend rates during the contractual term shall disclose the range of expected dividends
                                         used and the weighted-average expected dividends.&nbsp;&nbsp;The expected dividend yield
                                         is based on the Company&rsquo;s current dividend yield as the best estimate of projected
                                         dividend yield for periods within the expected term of the share options and similar
                                         instruments.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Risk-free rate(s).
                                         An entity that uses a method that employs different risk-free rates shall disclose the
                                         range of risk-free rates used.&nbsp;&nbsp;The risk-free interest rate is based on the
                                         U.S. Treasury yield curve in effect at the time of grant for periods within the expected
                                         term of the share options and similar instruments.</TD>
</TR></TABLE>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to ASC paragraph 505-50-25-7, if
fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods
or services (no specific performance is required by the grantee to retain those equity instruments), then,&nbsp;because of the
elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached.&nbsp;A
grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether
the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity
under the requirements of paragraph&nbsp;505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph
505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested,
non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services
(and no specific performance is required by the grantee in order to retain those equity instruments).&nbsp;Such an asset shall
not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity
instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity
instruments are transferred to other than employees in exchange for goods or services. Section&nbsp;505-50-30 provides guidance
on the determination of the measurement date for transactions that are within the scope of this Subtopic.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9,&nbsp;an
entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period
of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions.&nbsp;Any
measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash
for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A
recognized asset, expense, or sales discount shall not be reversed if a share option and similar instrument that the counterparty
has the right to exercise expires unexercised.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to ASC paragraph 505-50-30-S99-1,
if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity
instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are
not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should
be recorded.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Revenue Recognition</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company derives revenues from the sale
of a patented device.&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue is recorded when all of the following
have occurred: (1) persuasive evidence of an arrangement exists, (2) asset is transferred to the customer without further obligation,
(3) the sales price to the customer is fixed or determinable, and (4) collectability is reasonably assured.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Cost of Sales</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Cost of sales represents costs directly
related to the production and third party manufacturing of the Company&rsquo;s products.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Product sold is typically shipped directly
to the customer from the third party manufacturer; costs associated with shipping and handling is shown as a component of cost
of sales.&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Earnings (Loss) Per Share</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Basic net earnings (loss) per share is computed
by dividing net income (loss) for the period by the weighted average number of common stock outstanding during each period. Diluted
earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock,
common stock equivalents and potentially dilutive securities outstanding during each period.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company uses the &ldquo;treasury stock&rdquo;
method to determine whether there is a dilutive effect of outstanding convertible debt, option and warrant contracts. For the
years ended December 31, 2014 and 2013 the Company reflected net loss and a dilutive net loss, and the effect of considering any
common stock equivalents would have been anti-dilutive for the period. Therefore, separate computation of diluted earnings (loss)
per share is not presented for the years ended December 31, 2014 and 2013.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has the following common stock
equivalents at December 31, 2014 and 2013:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 46%; text-align: right">Convertible Debt&nbsp;&nbsp;(Exercise price - $0.25/share)</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">18,056,932</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">8,976,532</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: right">Stock Warrants (Exercise price - $0.001 - $0.375/share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,728,984</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,338,884</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">Stock Options (Exercise price - $0.375/share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: right; padding-bottom: 1pt">Unvested Restricted Stock - Chief Executive Officer</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">750,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">750,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">28,735,916</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">14,365,416</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD>
    </TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 1, 2013, the Company executed a
3,113.3:1 forward stock split. All share and per share amounts have been retroactively restated to the earliest period presented.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Income Tax Provision</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">From the inception of SQL-LLC, and through
November 6, 2012, the Company was taxed as a pass-through entity (LLC) under the Internal Revenue Code and was not subject to
federal and state income taxes; accordingly, no provision had been made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The financial statements reflect the Company&rsquo;s
transactions without adjustment, if any, required for income tax purposes for the period from November 7, 2012 to December 31,
2012. The net loss generated by the Company for the period January 1, 2012 to November 6, 2012 has been excluded from the computation
of income taxes.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for income taxes under
Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in the financial statements or tax returns.&nbsp;&nbsp;Under
this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of
assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.&nbsp;&nbsp;Deferred
tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets
will not be realized.&nbsp;&nbsp;Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or settled.&nbsp;&nbsp;The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations in
the period that includes the enactment date.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The Company adopted
section 740-10-25 of the FASB Accounting Standards Codification (&ldquo;Section 740-10-25&rdquo;). Section 740-10-25 addresses
the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial
statements.&nbsp;&nbsp;Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only
if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical
merits of the position.&nbsp;&nbsp;The tax benefits recognized in the financial statements from such a position should be measured
based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement.&nbsp;&nbsp;Section
740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim
periods and requires increased disclosures.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The estimated future tax effects of temporary
differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well
as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded
on its consolidated balance sheets and provides valuation allowances as management deems necessary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Management makes judgments as to the interpretation
of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition,
the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management&rsquo;s
opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies
from estimates, additional allowances or reversals of reserves may be necessary.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company's tax returns are subject to
examination by the federal and state tax authorities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Uncertain Tax Positions</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company did not take any uncertain tax
positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for
the reporting periods ended December 31, 2014 and 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Related Parties</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows subtopic 850-10 of the
FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to Section 850-10-20 the related
parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would be required,
absent the election of the fair value option under the Fair Value Option Subsection of Section 825&ndash;10&ndash;15, to be accounted
for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts
that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company;
f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate
interests; and g. Other parties that can significantly influence the management or operating policies of the transacting parties
or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that
one or more of the transacting parties might be prevented from fully pursuing its own separate interests.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements shall
include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other
similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of
consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature
of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts
were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary
to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for
each of the periods for which income statements are presented and the effects of any change in the method of establishing the
terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet
presented and, if not otherwise apparent, the terms and manner of settlement.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Contingencies</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows subtopic 450-20 of the
FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the
consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one
or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently
involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company
or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings
or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">If the assessment of a contingency indicates
that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in the Company&rsquo;s financial statements. If the assessment indicates that a potentially material
loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Loss contingencies considered remote are
generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. However, there is no
assurance that such matters will not materially and adversely affect the Company&rsquo;s business, consolidated financial position,
and consolidated results of operations or consolidated cash flows.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Subsequent Events</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows the guidance in Section
855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events.&nbsp;The Company will evaluate
subsequent events through the date when the&nbsp;financial statements are issued.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to ASU 2010-09 of the FASB Accounting
Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed
to users, such as through filing them on EDGAR.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Recently Issued Accounting
Pronouncements</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2014, the FASB issued ASU No. 2014-08,&nbsp;Presentation
of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures
of Disposals of Components of an Entity.&nbsp;The amendments in this Update change the requirements for reporting discontinued
operations in Subtopic 205-20.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Under the new guidance, a discontinued operation
is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and &ldquo;represents
a strategic shift that has (or will have) a major effect on an entity&rsquo;s operations and financial results.&rdquo; The ASU
states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business,
(iii) a major equity method investment, or (iv) other major parts of an entity. Although &ldquo;major&rdquo; is not defined, the
standard provides examples of when a disposal qualifies as a discontinued operation.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The ASU also requires additional disclosures
about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued
operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually
significant component of an entity that does not qualify for discontinued operations presentation in the financial statements.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The ASU is effective for public business
entities for annual periods beginning on or after December 15, 2014, and interim periods within those years.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In May 2014, the
FASB and International Accounting Standards Board issued a converged final standard on the recognition of revenue from contracts
with customers. This updated guidance provides a framework for addressing revenue recognition issues and replaces almost all existing
revenue recognition guidance in current U.S. generally accepted accounting principles. The core principle of the new standard
is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration
to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced
disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance
for multiple-element arrangements. This guidance is effective for interim and annual periods beginning after December 15, 2016.
Management has not yet evaluated the future impact of this guidance on the Company&rsquo;s financial position, results of operations
or cash flows.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In September 2014, the FASB issued ASU 2014-15,
<I>Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern.</I> This ASU describes how an entity
should assess its ability to meet obligations and sets disclosure requirements for how this information should be disclosed in
the financial statements. The standard provides accounting guidance that will be used with existing auditing standards. The amendments
in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter.
Early application is permitted. The adoption of this guidance will be examined for the year ended December 31, 2016, and if applicable
at that time, will require management to make the appropriate disclosures.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Other pronouncements issued by the FASB
or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to
be significant to the Company&rsquo;s financial position, results of operations or cash flows.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
3 Furniture and Equipment</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment consisted of the
following at December 31, 2014 and 2013:&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%; text-align: left; padding-left: 5.4pt">Office Equipment</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">5,221</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">12,984</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Machinery and Equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">115,538</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Furniture and Fixtures</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">29,070</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,013</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">Total</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">149,829</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,997</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Less: Accumulated Depreciation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(17,221</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(12,952</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Property and Equipment &ndash; net</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">132,609</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">6,046</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
4 Intangible Assets</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B>&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Intangible assets -patents consisted of
the following at December 31, 2014 and 2013:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%">Patents</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">61,690</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">36,950</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Less: Impairment Charges</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Less: Accumulated Amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(15,271</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(12,253</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Patents &ndash; net</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">46,419</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">24,697</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2014, future amortization
of intangible assets is as follows:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center">Year Ending December 31</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 43%; text-align: right">2015</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 43%; text-align: right">4,107</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2016</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,111</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2017</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,107</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2018</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,107</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2019</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,107</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">2020 and Thereafter</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25,880</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">46,419</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Actual amortization expense in future periods
could differ from these estimates as a result of future&nbsp;acquisitions, divestitures, impairments and other factors.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
5 GE Trademark License</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company entered into an amended agreement
with General Electric regarding the trademarking of its products. The license is amortized through its expiration in November,
2018.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%; text-align: left">GE Trademark License</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">12,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Less: Impairment Charges</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Less: Accumulated Amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,434,783</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Patents &ndash; net</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,565,217</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2014, future amortization
of intangible assets is as follows:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center">Year Ending December 31</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 43%; text-align: right">2015</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 43%; text-align: right">2,441,472</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2016</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,441,472</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2017</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,441,472</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">2018</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,240,801</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,565,217</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
6 Debt</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(A) Summary of Debt Transactions</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2014 and 2013, debt consists
of the following:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%; text-align: left; padding-left: 5.4pt">&nbsp;Notes payable</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">405,095</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">503,203</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Notes payable - related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,108</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Convertible notes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,487,234</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,194,133</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Convertible notes - related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,999</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;Less: debt discount</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,402,773</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,925,191</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Debt &ndash; net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">516,555</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">848,253</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Amortization of debt discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,827,534</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92,304</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Less: current portion - notes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(98,086</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(98,086</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Less: current portion convertible debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,250,981</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;Less: current portion - notes payable - related
    party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(26,108</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;Long term debt &ndash; net</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">995,022</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">816,362</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold"><B>&nbsp;</B>Notes Payable&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Third Party</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Related Party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; vertical-align: top">Totals</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; padding-left: 5.4pt">&nbsp;Balance; December 31, 2012</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">739,534</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">133,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">872,534</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;Proceeds</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">160,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">61,655</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">221,655</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;Repayments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(116,331</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(35,547</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(151,878</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Conversion of note payable to convertible debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(180,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(50,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(230,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;Debt forgiveness</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(83,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(183,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">&nbsp;Balance; December 31, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">503,203</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,108</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">529,311</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;Repayments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(98,108</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(26,108</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(124,216</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;Balance; December 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">405,095</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">405,095</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold"></P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Convertible Debt - Net&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has recorded derivative liabilities
associated with these convertible debt instruments, as more fully discussed at Notes 7 and 12 (C).</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Third Party</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Related Party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; vertical-align: top">Totals</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;Balance; December 31, 2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 46%; padding-left: 5.4pt">&nbsp;Proceeds</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">2,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">2,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">&nbsp;Repayments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Conversion of note payable to convertible debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">180,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">230,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Conversion of accrued interest into convertible debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,133</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,133</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Less: gross debt discount recorded</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,925,191</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,925,191</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;Add: amortization of debt discount</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">92,304</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">92,304</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">Balance; December 31, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">361,245</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">411,245</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 5.4pt">Proceeds</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,270,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,270,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt">Repayments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Less: gross debt discount recorded</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,203,354</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(46,105</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,249,459</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt; padding-bottom: 1pt">Add: Amortization of Debt Discount</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,484,004</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">23,104</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,507,108</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;Balance; December 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,911,995</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">26,999</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,938,994</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the $2,000,000 convertible
debt offering in November 2013, the Company issued 3,672,134 detachable warrants. The notes and warrants were treated as derivative
liabilities.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the $2,270,100 convertible
debt offering in May 2014, the Company issued 5,390,100 detachable warrants. The notes and warrants were treated as derivative
liabilities.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 26, 2013, May 8, 2014 and June
25, 2014 we conducted closings of the offering of our 12% Secured Convertible Promissory Notes (the &ldquo;12% Notes&rdquo;) in
the aggregate principal amount of $4,240,100 and/or our 15% Secured Convertible Promissory Notes in the aggregate principal amount
of $30,000 (the &ldquo;15% Notes&rdquo;, and together with the 12% Notes, each a &ldquo;Note&rdquo; and collectively, the &ldquo;Notes&rdquo;),
as applicable, with certain &ldquo;accredited investors&rdquo; (the &ldquo;Investors&rdquo;), as defined under Regulation D, Rule
501 of the Securities Act (collectively, the &ldquo;Notes Offering&rdquo;). The entire aggregate principal amount of the Notes
of $4,270,100 was outstanding as of March 15, 2015, such amount being exclusive of securities converted into the Notes separate
from the Notes Offering. Pursuant to the Notes Offering, the Company received $1,752,803, $1,400,000 and $800,500 in net proceeds
on November 26, 2013, May 8, 2014 and June 25, 2014, respectively.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition to the terms customarily included
in such instruments, the Notes began accruing interest on the date that each Investor submitted the principal balance of such
Investor&rsquo;s Note, with the interest thereon becoming due and payable on the one year anniversary of said date, and quarterly
thereafter. Upon a default of the Notes, the interest rate will increase by 2%. The principal balance of each Note and all unpaid
interest will become due and payable twenty-four (24) months after the date of issuance. The Notes may be prepaid with or without
a penalty depending on the date of the prepayment. The principal and interest under the Notes are convertible into shares of our
common stock at $0.25 per share and are secured by a first priority lien (subject only to an existing note with Signature Bank
of Georgia on our intellectual property and all substitutes, replacements and proceeds of such intellectual property) pursuant
to the terms of a Security Purchase Agreement, dated as of November 26, 2013, May 8, 2014 and June 25, 2014, as applicable, by
and between us and each Investor (the &ldquo;Security Agreement&rdquo;).</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to the Notes Offering, each Investor
also received five (5) year common stock warrants to purchase our common stock at $0.375 per share (each a &ldquo;Warrant&rdquo;
and collectively, the &ldquo;Warrants&rdquo;). Investors of the 12% Notes received Warrants with 25% coverage based on a pre-determined
valuation of the Company. Investors of the 15% Notes received Warrants with 15% coverage based on the pre-determined valuation
of the Company. Investors with a principal investment amount equal to or greater than $250,000 received Warrants with a bonus
40% coverage (&ldquo;Bonus Coverage&rdquo;); however, if an Investor previously invested $250,000 or more in the Notes Offering,
such Investor received Bonus Coverage if such Investor subsequently invested $100,000 or more in the Notes Offering. In addition
to the terms customarily included in such instruments, the Warrants may be exercised into our common stock by the Investors by
providing to the Company a notice of exercise, payment and surrender of the Warrant.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the Notes Offering, we
entered into Registration Rights Agreements, each dated as of November 26, 2013, May 8, 2014 and June 25, 2014 and each by and
between us and each of the Investors (collectively, the &ldquo;Registration Rights Agreements&rdquo;) whereby we agreed to prepare
and file a registration statement with the SEC within sixty (60) days after execution of the applicable Registration Rights Agreement
and to have the registration statement declared effective by the SEC within ninety (90) days thereafter (the &ldquo;Registration
Statement&rdquo;). The Registration Statement covered shares of our common stock, including shares of our common stock underlying
the Notes, Warrants and certain other options and warrants.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Because we were unable to file a Registration
Statement pursuant to the terms of each Registration Rights Agreements dated as of November 26, 2013 or May 8, 2014, we were in
default under such Registration Rights Agreements (the &ldquo;Filing Default Damages&rdquo;). Pursuant to the Registration Rights
Agreement, the Filing Default Damages mandate that the Company shall pay to the Investors, for each thirty (30) day period of
such failure and until the filing date of the Registration Statement and/or the common stock may be sold pursuant to Rule 144,
an amount in cash, as partial liquidated damages and not as a penalty, equal to 2% percent of the aggregate gross proceeds paid
by the Investors for the Notes. If the Company fails to pay any partial liquidated damages in full within five (5) days of the
date payable, which is the Note maturity date, the Company shall pay interest thereon at a rate of 18% per annum (or such lesser
maximum amount that is permitted to be paid by applicable law) to the Investors, accruing daily from the date such partial liquidated
damages are due until such amounts, plus all such interest thereon, are paid in full.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition, because we were unable to have
a Registration Statement declared effective pursuant to the terms of the Registration Rights Agreements dated as of November 26,
2013 or May 8, 2014, we were in default under such Registration Rights Agreements (the &ldquo;Effectiveness Default Damages&rdquo;).
Pursuant to the Registration Rights Agreement, the Effectiveness Default Damages mandated that the interest rate due under the
Note corresponding to such Registration Rights Agreement will increase 2% above the then effective interest rate of such Note,
and shall continue to increase by 2% every 30 days until a registration statement is declared effective.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company&rsquo;s Registration Statement
was first filed on August 1, 2014, and was declared effective by the SEC on October 22, 2014. As of August 1, 2014, the date the
Company first filed the Registration Statement and the date that the Filing Default Damages stopped accruing, the Filing Default
Damages to be paid by the Company to the Investors were $271,733. As of October 22, 2014, the date the Registration Statement
was declared effective, the interest rate due under the 12% Notes and 15% Notes dated as of November 26, 2013 was 24% and 27%,
respectively, as a consequence of the Effectiveness Default Damages.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;On December 11, 2014, the Company
sent a letter to the Investors holding Notes dated November 26, 2013 (the &ldquo;2013 Investors&rdquo;) concerning the first interest
payment that was scheduled to be paid pursuant to the Notes dated November 26, 2013 on the one year anniversary of the date that
each 2013 Investor submitted payment for their Note (the &ldquo;First Interest Payments&rdquo;). The Company noted the significant
progress it had made in 2014, and expressed its preference to conserve working capital to support operations and customer orders.
The Company invited the 2013 Investors to convert the First Interest Payments into shares of the Company&rsquo;s common stock
to further this purpose. The Company also asked each 2013 Investor to execute an Agreement and Waiver (the &ldquo;Agreement and
Waiver&rdquo;), which granted the Company a grace period, deferring the Company&rsquo;s obligation to make payment of the First
Interest Payment and interest that was due under the Note through November 26, 2014 (the &ldquo;Interest Due&rdquo;) until February
24, 2015 (the &ldquo;Extension&rdquo;), during which time such deferment would not be considered an Event of Default under the
2013 Investor&rsquo;s Note. In connection with the Extension, subsequent quarterly payments of interest will be determined based
on the issuance date of each Note (i.e., November 26, 2013) rather than the date that each 2013 Investor first submitted payment
for their Note, the sole purpose and impact of this change being to reduce ongoing costs to administer the Notes. In return for
granting the Extension, we offered to capitalize the Interest Due at a rate of 12% (the &ldquo;Additional Interest&rdquo;), which
was convertible into shares of the Company&rsquo;s common stock at the conversion price of $0.25 per share as of February 24,
2014, unless the 2013 Investor requested to receive the Additional Interest in cash 15 days prior to the end of the Extension.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">&nbsp;(B) Terms of Debt</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In 2013, the company issued $2,244,133 in
convertible bonds with interest rates varying from 12% to 15%. These bonds mature in November 2015.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In 2014, the company issued $2,270,100 in
convertible bonds. These bonds carry interest at 12% and mature in May and June 2016.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">All convertible debt and related warrants
issued with the convertible notes in 2014 and 2013 are convertible at $0.25 and $0.375 per share, respectively; however, given
the existence of a &ldquo;ratchet feature&rdquo;, which allows for a lower offering price if the Company offers shares to the
public at a lower price.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(C) Future Commitments</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2014, the Company has outstanding
debt of $4,919,328.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Future minimum repayment obligations are
as follows:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Year Ended December 31</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; vertical-align: top">2015</TD><TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">2,342,219</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">2016</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,577,109</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;Less: unamortized debt discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,575,239</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; vertical-align: top">&nbsp;Less: current maturities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,349,067</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; vertical-align: top">&nbsp;Debt - long term</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">995,022</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
7 Derivative Liabilities</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company identified conversion features
embedded within convertible debt and warrants issued in 2013. The Company has determined that the features associated with the
embedded conversion option, in the form a ratchet provision, should be accounted for at fair value, as a derivative liability,
as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion
transactions.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of the application of ASC No.
815, the fair value of the ratchet feature related to convertible debt and warrants is summarized as follow:&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%; text-align: left">&nbsp;Fair value at the commitment date - convertible debt</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">4,892,234</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">2,414,585</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;Fair value at the commitment date - warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">677,214</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">682,809</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;Reclassification of derivative liabilities to additional paid in &nbsp;&nbsp;&nbsp;capital
    related to warrants exercised that ceased being a&nbsp;&nbsp;derivative liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(214,769</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(311,709</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;Fair value mark to market adjustment - stock options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25,614</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;Fair value mark to market adjustment - convertible debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(668,189</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(28,586</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;Fair value mark to market adjustment - warrants</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(13,701</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5,595</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;Totals</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,647,175</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,751,504</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value at the commitment and re-measurement
dates for the Company&rsquo;s derivative liabilities were based upon the following management assumptions as of December 31, 2014:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="text-align: center; font-weight: bold; vertical-align: top">
    <TD STYLE="padding-bottom: 1pt"></TD>
    <TD STYLE="border-bottom: Black 1pt solid">Commitment Date</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">Remeasurement Date</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="text-align: center; vertical-align: top">
    <TD STYLE="width: 48%; text-align: left; vertical-align: top">&nbsp;Expected dividends</TD>
    <TD STYLE="width: 25%">0%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 25%">0%</TD><TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="text-align: center; vertical-align: top">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;Expected volatility</TD>
    <TD>150%</TD><TD>&nbsp;</TD>
    <TD>150%</TD><TD>&nbsp;</TD></TR>
<TR STYLE="text-align: center; vertical-align: top">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;Expected term</TD>
    <TD>&nbsp;2 - 5 years&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;0.9 - 3.91 years&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="text-align: center; vertical-align: top">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;Risk free interest rate</TD>
    <TD>&nbsp;0.29% - 1.68%&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;0.67% - 1.65%&nbsp;</TD><TD>&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
8 Debt Discount</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recorded the debt discount to
the extent of the gross proceeds raised, and expensed immediately the remaining fair value of the derivative liability, as it
exceeded the gross proceeds of the note.&nbsp;&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recorded a derivative expense
of $568,485 in 2014 and $1,156,193 for 2013.&nbsp; &nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recorded amortization of derivative
discount of $1,507,107 in 2014 and $92,304 for 2013. These amounts are included in interest expense.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
9 Debt Issue Costs</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Debt issue costs are summarized as follows:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Debt issue costs - net - December 31,2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; text-align: left; padding-left: 5.4pt">&nbsp;Debt issue costs</TD><TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">247,197</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;Accumulated amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(11,986</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 5.4pt">&nbsp;Debt issue costs - net - December 31,2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">235,211</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 5.4pt">Debt issue cost additions</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Accumulated amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(154,851</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;Debt issue costs - net - December 31,2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">161,946</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company incurred $142,865 and $11,986
in 2014 and 2013, respectively and recorded it as interest expense</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-decoration: underline; text-align: justify"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-decoration: underline; text-align: justify">Note 10 GE
Royalty Obligation</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In 2011, the Company executed a Trademark
Licensing Agreement with General Electric (&ldquo;GE&rdquo;), which allows the Company the right to market certain ceiling light
and fan fixtures displaying the GE brand. The GE trademark license agreement imposes certain manufacturing and quality control
conditions that the Company must maintain in order to continue to use the GE brand.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The license is non-transferable and cannot
be sub licensed. Various termination clauses are applicable, however, none were applicable as of December 31, 2014 and 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In August, 2014, the Company entered into
a second amendment pertaining to its royalty obligations. Under the terms of the agreement, the Company agreed to pay a total
of at least $12,000,000 by November 2018 for the rights assigned in the original contract. In case of the Company does not pay
GE a total of at least $12,000,000 in cumulative royalties over the Term, the difference between $12,000,000 and the amount of
royalties paid to GE is owed in December, 2018.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Payments are due quarterly based upon the
prior quarters&rsquo; sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Trademark and License obligation will
be paid from sales of GE branded product subject to the following repayment:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Net
                                         Sales in Contract Year</B></P></TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid; font-weight: bold">Percentage of the Contract Year
    Net Sales owed to GE</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 48%; text-align: left">$0 - $50,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 48%; text-align: left">7%</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left">$50,000,001 - $100,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left">6%</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"></TD><TD STYLE="text-align: left">$100,000,001+</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left">5%</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Since the Company does not have the ability
to estimate the sales of GE branded product, the liability is classified as long-term. As sales are recognized, the Company will
estimate the portion it expects to pay in the current year and classify as current.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
11 Income Taxes</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Income taxes are provided for the tax effects
of transactions reported in the financial statements and consist of taxes currently due.&nbsp;&nbsp;Deferred taxes relate to differences
between the basis of assets and liabilities for financial and income tax reporting which will be either taxable or deductible
when the assets or liabilities are recovered or settled.&nbsp;&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2014, the Company has a
net operating loss carry-forward of approximately $4,136,000 available to offset future taxable income expiring through 2034.
Utilization of future net operating losses may be limited due to potential ownership changes under Section 382 of the Internal
Revenue Code.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The valuation allowance at December 31,
2013 was approximately $119,000. The net change in valuation allowance during the year ended December 31, 2014 was an increase
of approximately $2,230,000. In assessing the realisability of deferred tax assets, management considers whether it is more likely
than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred
income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences
become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income,
and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough
uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full
valuation allowance as of December 31, 2014.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The effects of temporary differences that
gave rise to significant portions of deferred tax assets at December 31, 2014 and 2013 are approximately as follows:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; text-align: left">&nbsp;Net operating loss carryforward</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(2,429,000</TD><TD STYLE="width: 1%; text-align: left">)</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(199,000</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;Gross Deferred Tax Assets</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,429,000</TD><TD STYLE="text-align: left">)</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(199,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;Less Valuation Allowance</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,429,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">199,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;Total Deferred Tax Assets - Net</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">There was no income tax expense for the
years ended December 31, 2014 and 2013 due to the Company&rsquo;s net losses</P>
<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company&rsquo;s tax expense differs
from the &ldquo;expected&rdquo; tax expense for the years ended December 31, 2014 and 2013, (computed by applying the Federal
Corporate tax rate of 34% to loss before taxes and 6% for Georgia State Corporate Taxes, the blended rate used was 37.96%), are
approximately as follows:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 72%; text-align: left">&nbsp;Computed "expected" tax expense (benefit) - Federal</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(2,630,000</TD><TD STYLE="width: 1%; text-align: left">)</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(875,000</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;Computed "expected" tax expense (benefit) - State</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(458,000</TD><TD STYLE="text-align: left">)</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(102,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;Derivative expense</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">216,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">439,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;Loss on debt extinguishment</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;Gain on debt forgiveness</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;Share based payments</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">286,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;Amortization of patent</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;Amortization of debt issue costs</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;Amortization of debt discount</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;Amortization of patent</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">909,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;Change in value of derivative liability</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(269,000</TD><TD STYLE="text-align: left">)</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;Change in valuation allowance</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,230,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">181,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
12 Stockholders Deficit</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(A) Common Stock</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In 2014, the Company issued the following
common stock:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Transaction Type</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Quantity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Valuation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Range of Value per Share</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; text-align: left; padding-bottom: 1pt">Common stock issued in exercise of options</TD><TD STYLE="width: 5%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; padding-bottom: 1pt; text-align: right">1,000,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="width: 11%; padding-bottom: 1pt; text-align: right">1,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 11%; border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Common stock issued per mutual release and waiver (1)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">250,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">62,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,250,000&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">63,500</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>




<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The following is a more detailed description
of the Company&rsquo;s stock issuance from the table above:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>(1) Services Rendered - Related Party</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2014, the Company issued 750,000
of restricted, nonvested shares to new Chief Executive Officer. The shares are to vest as follows: 250,000 in May 2015 and 500,000
shares in December 2015. The shares are valued at $0.25 per share.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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    <!-- Field: /Page -->

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company&rsquo;s former Chief Executive
Officer received 1,250,000 restricted unvested shares in association with an employment contract. These restricted shares were
to vest as follows: 500,000 on November 15, 2013 with the remaining 750,000 shares to vest evenly (250,000 shares each vesting
period) on December 31, 2014, 2015 and 2016. The shares were valued based on recent third party cash offering of convertible debt
containing an exercise price of $0.25/share. In November 2014, the agreement was terminated and the Company entered into a new
Agreement and Mutual Release with that former CEO. As of that date (November 2014), 750,000 of the aforementioned 1,250,000 shares
were fully vested. In accordance with this new Agreement, the company issued 250,000 shares that vested on December 31, 2014 and
the executive retained 500,000 shares of the previous granted (fully vested) shares. The remaining 500,000 unvested shares were
forfeited by the former CEO.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In 2013, the Company issued the following
common stock:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Transaction Type</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"></TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Quantity</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Valuation</TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">Range of Value per Share</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 45%; text-align: right">Warrants exercised</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(1</TD><TD STYLE="width: 1%; text-align: left">)</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,400,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,400</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">0.001</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">Services rendered - related party</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2</TD><TD STYLE="text-align: left">)</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">500,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">125,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.25</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: right; padding-bottom: 1pt">Acquisition of 4.5% interest in subsidiary</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">(3</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,467,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">366,750</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.25</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; padding-bottom: 2.5pt"></TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3,367,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">439,150</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.001&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.250</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of stock issued was based
upon the following:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Warrants were
                                         exercised for cash under the terms of the agreement at $0.001 per share.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Services rendered
                                         &ndash; related party were based upon recent third party cash issuances of convertible
                                         debt with a conversion price of $0.25/share. This represented the best evidence of fair
                                         value.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Acquisition
                                         of 4.5% ownership in Subsidiary is deemed a capital transaction since control of the
                                         Subsidiary was never lost. Valuation was based upon recent third party cash issuances
                                         of convertible debt with a conversion price of $0.25/share. This represented the best
                                         evidence of fair value. See #3 below for additional discussion.</TD>
</TR></TABLE>


<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The following is a more detailed description
of some of the Company&rsquo;s stock issuances from the table above:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(1) Warrants Exercised
for Cash</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with a warrant exercise, a
third party paid cash to obtain these shares.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(2) Services Rendered
&ndash; Related Party</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company&rsquo;s Chief Executive Officer
received these shares as a sign on bonus. There are no future service requirements and there are no claw back or forfeiture rights
associated with this stock grant. The shares are valued based on a recent third party cash offering of convertible debt containing
an exercise price of $0.25/share. Also see Note 12 (B).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(3) Acquisition of Subsidiary
Ownership Interest</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2013, the Company reacquired 4.5%
ownership in its subsidiary, which it had previously sold in 2012. The transaction was accounted for as a capital transaction
since the parent had control of the Subsidiary at all times. The purchase reflected 4.5% of the Subsidiary being reacquired, which
increased the parent&rsquo;s ownership from 94.35% to 98.8%. The transaction included the valuation of shares issued at $366,750,
however, in connection with establishing the valuation adjustment of the noncontrolling interest reacquired, $19,538 represented
the net increase to additional paid in capital and reduction of the noncontrolling interest. As a result of this transaction,
the noncontrolling interest post repurchase is 1.2%.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold"></P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(B) Additional Paid in
Capital and Other Equity Transactions</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline"><B>&nbsp;</B>The
following transactions occurred during the year ended December 31, 2014:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(1) Derivative Liability</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Reclassification of derivative liability
associated with warrants of $214,769.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(2) Services Rendered
&ndash; Related Parties</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Common stock issued for services &ndash;
related party of $76,312.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">The
following transactions occurred during the year ended December 31, 2013:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(1) Debt Forgiveness
&ndash; Related Parties</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain existing note holders forgave $83,000.
There was no gain or loss on the transaction, rather a charge to additional paid in capital due to being a related party transaction.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(2) Modification of Debt
(Extinguishment Accounting)<B> </B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">A board member and third party agreed to
convert an aggregate $244,133 of outstanding conventional debt and accrued interest into convertible debt, under the same terms
as the $2,000,000 convertible debt offering occurring in November 2013.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The exchange of an outstanding debt instrument
for a new debt instrument with the same lender/creditor results in an extinguishment of the old debt instrument if the debt instruments
have substantially different terms. Similarly, a modification of the terms of an outstanding debt instrument should be accounted
for like, and reported in the same manner as, an extinguishment if the old and new debt instruments have substantially different
terms.&nbsp;&nbsp;In addition, the new debt instrument is considered to be substantially different from the old if the modification
or exchange eliminates or adds a substantive conversion option.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result, the Company determined a loss
on debt extinguishment of $16,009. Of the total loss, $12,731 was recorded to the statement of operations pertaining to a third
party; the remaining $3,278 could not be recorded as a loss to the statement of operations due to being a related party transaction,
rather, the Company accounted for this loss on extinguishment as a capital transaction and recorded this amount as additional
paid in capital.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(3) Payment of Corporate
Expenses by Stockholders</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Existing stockholders transferred shares
owned in the Company to pay corporate expenses. The services had a fair value of $562,500, based upon recent third party convertible
debt (November 2013 offering) that was sold having a conversion price of $0.25/share.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">The
following transactions occurred during the year ended December 31, 2012:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">Sale of Member Units</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Prior to converting to a C Corp (see Note
1), the Subsidiary sold member units for $774,000. The sale reflected 4.5% of the subsidiary being sold, which reduced the parent&rsquo;s
ownership from 98.8% to 94.35%. The transaction was accounted for as a capital transaction since the parent had control of the
Subsidiary at all times. The sale resulted in an allocation to the noncontrolling interest valued at $5,193.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold"></P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(C) Stock Options</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 3, 2013, the Company issued
300,000 stock options, having a fair value of $66,785, which was expensed immediately since all stock options vested immediately.&nbsp;&nbsp;These
options expire on September 2, 2018 (5 years). All options were granted to Board Directors for services rendered, and included
as a component of general and administrative expense, as a result, these grants were considered related party transactions. Of
the total options granted, 100,000 were cancelled in 2014 as a Board Director resigned.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company applied fair value accounting
for all share based payment awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes
option-pricing model. The Black-Scholes assumptions used in the year ended December 31, 2014 is as follows:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 50%; text-align: left">Options Granted</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">200,000</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Grant Date</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">September 3, 2013</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Exercise Price</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.375</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Expected Dividends</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0%</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Expected Volatility</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150%</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Risk Free Interest Rate</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.03%</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Expected Life of Options</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;4 Years&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Expected Forfeitures</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0%</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Fair Value per Stock Option</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.20</TD>
    </TR>
</TABLE>


<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;The following is a summary of the
Company&rsquo;s stock option activity:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Weighted Average</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Aggregate</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Weighted Average</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Remaining Contractual Life</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Intrinsic</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Options</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Exercise Price</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">(In Years)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Value</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">Balance - December 31, 2012</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 16%; text-align: right">Granted</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 16%; text-align: right">300,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 16%; text-align: right">0.375</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">5.0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">Exercised</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">Forfeited/Cancelled</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">Balance - December 31, 2013 - outstanding</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.375</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.67</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">Granted</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">Exercised</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">Granted</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">Forfeited/Cancelled</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">Balance-
                                         December 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">200,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.375</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3.67</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(D) Stock Warrants</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">All warrants issued during 2014 and 2013
were accounted for as derivative liabilities as the warrants contained a ratchet feature. See Note 7.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">During 2013, the Company issued 6,738,884
warrants. Of the total warrants granted, 4,338,884 expire 5 years from issuance, while 2,400,000 were scheduled to expire on December
31, 2013.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Of the total warrants granted during 2013,
6,614,801 were granted to third parties, while 124,083 were granted to related parties, consisting of the Company&rsquo;s former
Chief Executive Officer.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">During 2014, the Company issued 5,390,100
warrants. The warrants granted expire 5 years from issuance on various dates during 2019.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">During 2014, of the total warrants granted
4,740,100 granted to third parties, while 650,000 were granted to related parties, consisting of the Company&rsquo;s former Chief
Executive Officer.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">During 2013, the Company entered into convertible,
secured note agreements. As part of these agreements, the Company issued warrants to purchase 3,672,134 shares of common stock.
The warrants vest immediately and expire November 26, 2018, with an exercise price of $0.375.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">During 2013, the Company issued 3,066,750
warrants for services performed. The warrants vest immediately and expire on December 31, 2013 through November 25, 2018, with
exercise prices ranging from $0.001 - $0.375.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">During 2014, the Company entered into convertible,
secured note agreements. As part of these agreements, the Company issued warrants to purchase 5,390,100 shares of common stock.
The warrants vest immediately and expire on various dates in 2019, with an exercise price of $0.375.&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The Black-Scholes assumptions used in the
computation of derivative expense for year ended December 31, 2014 is as follows:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%">&nbsp;Stock price</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.25</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.25</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;Exercise price</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.38</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.38</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Expected dividends</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0%</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0%</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Expected volatility</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150%</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150%</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;Risk free interest rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.65%</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.68%</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;Expected term</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3.68
                                         years</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5
                                         years</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">A summary of warrant activity for the Company
for the year ended December 31, 2014 is as follows:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Warrants</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average Exercise Price</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average Remaining Contractual
    Life (in Years)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right"><B>Balance: December
                                         31, 2012</B></TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 20%; font-weight: bold; text-align: right"><B>Granted
                                         </B></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 19%; text-align: right">6,738,884</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 19%; text-align: right">0.242</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 19%; text-align: right">5.0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right"><B>Exercised</B></TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,400,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: right"><B>Cancelled/Forfeited</B></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,000,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: right"><B>Balance:
                                         December 31, 2013</B></TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,338,884</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.242</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4.9</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right"><B>Granted </B></TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,390,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.375</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right"><B>Exercised</B></TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: right"><B>Cancelled/Forfeited</B></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: right"><B>Balance:
                                         December 31, 2014</B></TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,728,984</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.375</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4.2</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2014, the Company received $1,000
in connection with a warrant exercise of 1,000,000 warrants that had been assigned from one investor (originally held 2,400,000
and exercised 1,400,000 in 2013). There was no additional compensation expense recorded on this transaction.</P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
13 Commitments</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(A) Operating Lease</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In October, 2014, the Company executed a
53 month lease for a new corporate headquarters with a base rent of $97,266 escalating annually through 2019. The Company paid
a security deposit of $1,914.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2014, the Company executed a
39 month lease for a corporate headquarters. The Company paid a security deposit of $27,020.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In October, 2014, the Company entered into
a sublease agreement to sublease its previous office space through March, 2017.&nbsp; In connection with the sublease, the Company
collected $34,981 as a security deposit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">The minimum rent obligations are approximately
as follows:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Minimum</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Sublease</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Net</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Year</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Obligation</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Rentals</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Obligation</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 20%; text-align: center; vertical-align: top">2015</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 19%; text-align: center; vertical-align: top">97,901</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 19%; text-align: center; vertical-align: top">84,165</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 19%; text-align: center; vertical-align: top">13,736</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">2016</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">109,720</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">86,688</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">23,032</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">2017</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">46,568</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">22,263</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">24,305</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">2018</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">25,154</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">25,154</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">2019</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">8,614</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">8,614</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: center; vertical-align: top">Total</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: center; vertical-align: top">287,957</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: center; vertical-align: top">193,116</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: center; vertical-align: top">94,841</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold">(B) Employment Agreement
&ndash; Chief Executive Officer</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2014, the Company entered into
an employment agreement with its new Chief Executive Officer. In addition to salary, the agreement provided for the issuance of
750,000 restricted shares to him, vesting as follows: 250,000 after the first 6 months of employment and 500,000 additional shares
at December 31, 2015. Under terms of the agreement the executive would receive additional compensation in the form of stock options
to purchase shares of Company stock equal to one half of one percent (.005) of quarterly net income. The strike price of the options
will be established at the time of the grant. The options will vest in twelve months and expire after sixty months. In addition
to the stock options compensation, the executive has performance incentives tied to revenue and profits. As there were no revenues
or profit for years ending December 31, 2014 or 2013, no additional options were issued or profit sharing compensation was provided
to the Chief Executive Officer.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 15, 2013, the Company executed
an employment agreement with the then Chief Executive Officer. The term commenced January 1, 2014 and was to expire on December
31, 2018. That agreement was cancelled upon the Company executing a Mutual Release and Waiver agreement (Termination Agreement)
with the CEO dated November, 2014. The Termination Agreement allowed for immediate vesting of 750,000 shares of the original 1,250,000
unvested shares previously granted to the CEO. In addition the company agreed to pay the executive .5% (.005) of sales associated
with one selected customer occurring for up to 36 months. As there were no sales or profit for year ending for year ending 2014
or 2013, no additional compensation was provided to this previous CEO.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(C) Consulting Agreement</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 1, 2013, the Company executed
a 3 year consulting agreement with a Non-Executive Director, having the following terms:</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Annual salary
                                         of a minimum $150,000; and</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">&bull;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Cash, stock
                                         or 5 year stock options (cashless exercise option by holder) equal to 0.5% of Company&rsquo;s
                                         annual gross revenue (sales less returns and discounts).</TD>
</TR></TABLE>




<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
14 Going Concern</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">As reflected in the accompanying financial
statements, the Company had net losses of $6,804,749 and $2,607,768 for year ending December 31, 2014 and 2013, respectively and
net cash used in operations of $1,800,231 and $685,729 for the year ended December 31, 2014 and 2013, respectively. The Company
had a working capital deficit of $5,850,064 and $1,810,104 at December 31, 2014 and 2013 respectively; accumulated deficit of
$15,324,264 and $8,519,517 at December 31, 2014 and 2013, respectively. These factors raise substantial doubt about the Company's
ability to continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">Management believes that the Company&rsquo;s
ability to continue as a going concern will be dependent on its ability successfully implement its plans, which includes the ability
to generate sufficient funds from its operations. The Company&rsquo;s ability to achieve these objectives cannot be determined
at this time. In the event the Company does not achieve these objectives, it will be necessary to raise additional capital through
debt and/or equity markets or from other traditional financing sources, including convertible debt and/or other term notes, until
such time that funds provided by operations are sufficient to fund working capital requirements. There is no guarantee that the
Company will be successful in raising additional capital. If the Company is unable to raise additional capital and/or generate
significant sales growth in the near term there is a risk that the Company could default on debt maturing during 2015 and/or 2016,
and could be required to significantly reduce the scope of its operations if no other means of financing operations are available.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify; font-weight: bold; text-decoration: underline">Note
15 Subsequent Events</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">On January 23, 2015, the Company sent
a letter agreement to the Investors holding Notes dated November 26, 2013 and May 8, 2014, which constituted all Investors with
Filing Default Damages or Effectiveness Default Damages due to them pursuant to the Registration Rights Agreements dated as of
November 26, 2013 or June 30, 2014 (the &ldquo;Agreement to Convert&rdquo;). The Company invited the Investors, as applicable,
to elect to convert the Interest Due and/or the Filing Default Damages and Effectiveness Default Damages into shares of the Company&rsquo;s
common stock at a price of $0.25 per share, and asked each Investor, as applicable, to make such election by acknowledging and
returning the letter agreement to the Company.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">As of March 24, 2015, twenty-five 2013 Investors
returned a signed Agreement and Waiver to the Company, resulting in Additional Interest of $6,532, three 2013 Investors refused
to sign the Agreement and Waiver, and three 2013 Investors did not respond to the Company&rsquo;s letter. One 2013 Investor elected
to receive the Additional Interest in cash, and the remaining 2013 Investors who signed the Agreement and Waiver received a total
of 25,753 shares of the Company&rsquo;s common stock in exchange for Additional Interest totaling $6,435.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">As of March 24, 2015, out of thirty-four
Investors who received an Agreement to Convert, twenty Investors elected to convert the Interest Due, the Filing Default Damages
and the Effectiveness Default Damages into shares of the Company&rsquo;s common stock, six Investors elected to receive cash rather
than convert, and eight Investors did not respond to the Company&rsquo;s invitation. As a consequence, the Company will issue
1,575,490 shares of its common stock to accepting Investors in exchange for Interest Due, Filing Default Damages and Effectiveness
Default Damages totaling $393,872.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">In total, the Company will issue 1,601,243
shares of its common stock to Investors in exchange for Additional Interest, Interest Due, Filing Default Damages and Effectiveness
Default Damages totaling $400,310.</P>

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"></P>

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<P STYLE="margin-top: 0; margin-bottom: 0; text-align: justify">This prospectus is part of a Registration Statement we filed with
the SEC. You should rely only on the information or representations contained in this prospectus. We have not authorized anyone
to provide information other than that provided in this prospectus. We are not making an offer of these securities in any jurisdiction
or state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any
date other than the date on the front of the document.</P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 11.25pt 0 0; text-align: center"><IMG SRC="image_002.jpg" ALT="" STYLE="height: 136px; width: 312px"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 11.25pt 0 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>4,282,666 Shares of Common Stock</B></P>

<P STYLE="margin: 0; text-align: justify"><B></B>&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/0.05pt Times New Roman, Times, Serif; margin: 0 40.1pt 0 34.55pt">&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 40.1pt 1pt 34.55pt"><DIV STYLE="font-size: 1pt; border-top: black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"><B>PROSPECTUS</B></P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/0.05pt Times New Roman, Times, Serif; margin: 0 40.1pt 0 34.55pt">&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 40.1pt 1pt 34.55pt"><DIV STYLE="font-size: 1pt; border-top: black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt/0.05pt Times New Roman, Times, Serif; margin: 1pt 40.1pt 0 34.55pt">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center">January 22, 2016</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0; text-align: justify"></P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"></P>

<P STYLE="margin: 0; text-align: justify"></P>


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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
