8.00%

Fair value of option liabilities

Apr. 01, 2016

$ 794,350

Total amortization relating to the discount

794,350

$ 198,200

$ 111,808

$ 109,029

$ 499,773

$ 311,625

387,965

718,640

$ 0.25

Fair value of conversion option liabilities

20,763

110,000

Additional contractual interest

1,729

Interest expense on the convertible debentures

$ 79,914

$ 239,742

253,061

$ 280,422

Covertible debentures maturity value

$ 1,915,200

Converion price, description

The Exchange Agreement and the 2015 SPA triggered anti-dilution adjustments to the warrants issued on the Existing Debentures based on a $0.25 per share conversion price (adjusted from the original stated conversion price of $0.43 per share), which reduced the exercise price to $0.25 per share and increased the number of shares issuable upon the exercise of the Existing Warrants from 4,818,605 to 8,288,000 shares.

The Exchange Agreement and the 2014 SPA trigger anti-dilution adjustments to the warrants issued on the Existing Debentures based on a $0.25 per share conversion price (adjusted from the original stated conversion price of $0.43 per share), which reduces the exercise price to $0.25 per share and increases the number of shares issuable upon the exercise of the Existing Warrants from 4,818,605 to 8,288,000 shares.

Debt instrument frequency of payment

532,944

$ 0

$ 51,153

On January 1, April 1, July 1 and October 1, beginning on October 1, 2014.

Debt default description

Upon any Event of Default (as defined in the 2014 Debentures), the outstanding principal amount of the 2014 Debentures, plus liquidated damages, interest, a premium of 30% and other amounts owing in respect thereof through the date of acceleration, shall become, at the debenture holders' election, immediately due and payable in cash. Commencing five days after the occurrence of any Event of Default, the interest rate on the 2014 Debentures shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law.

Upon any Event of Default (as defined in the Debenture), the outstanding principal amount of the Debenture, plus liquidated damages, interest, a premium of 30% and other amounts owing in respect thereof through the date of acceleration, shall become, at the 2014 Holders' election, immediately due and payable in cash. Commencing five days after the occurrence of any Event of Default, the interest rate on the Debenture shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law.

Penalty on convertible debentures

$ 1,247,310

October 1, 2015 [Member]

Debt redemption amount

998,925

$ 998,925

998,925

January 1, 2016 [Member]

Debt redemption amount

998,925

April 1, 2016 [Member]

Debt redemption amount

$ 1,997,850

1,997,850

Minimum [Member]

$ 1,247,310

Maximum [Member]

Hillair Capital Investments Lp [Member]

$ 5,405,010

$ 756,000

Merriman Capital, Inc. [Member]

$ 96,931

$ 2,858

Frank Casano [Member]

$ 60,801

$ 560,000

8.00%

Oct. 15, 2014

Number of shares issuable upon conversion of debentures

$ 500,000

1,302,326

$ 60,000

Description for conversion price for periodic redemption in shares

$ 280,000

Based on a conversion price equal to the lesser of (a) $0.43 per share, subject to adjustments upon certain events, and (b) 90% of the average of the volume weighted average price for the 20 consecutive trading days prior to the applicable redemption date, provided that the conversion price shall be equal to at least a $0.01 discount to the volume weighted average price for the 20 consecutive days that is immediately prior to the applicable redemption date.

Next View Capital Lp [Member]

$ 0

51,153

$ 69,933

$ 392,000

8.00%

Jul. 01, 2014

Number of shares issuable upon conversion of debentures

$ 350,000

911,628

$ 42,000

$ 24,322

$ 0.23

Number of common stock purchase due to issuance of warrants

$ 28,000

36,466

Description for conversion price for periodic redemption in shares

$ 756,000

$ 0

33,926

Masterson [Member]

60,801

$ 560,000

8.00%

Oct. 15, 2014

Number of shares issuable upon conversion of debentures

$ 500,000

1,302,326

$ 60,000

Description for conversion price for periodic redemption in shares

$ 280,000

Senior Convertible Debentures [Member]

$ 2,080,500

8.00%

Number of shares issuable upon conversion of debentures

Apr. 01, 2016

8,322,000

$ 255,500

Percentage of conversion price

$ 0.25

Warrant term

5 years

Warrants exercise price

$ 0.275

110.00%

Fair value of conversion option liabilities

$ 20,000

20,000

$ 413,606

Additional contractual interest

$ 66,595

Covertible debentures maturity value

$ 1,825,000

Converion price, description

The Company entered into a Securities Purchase Agreement (the "2014 SPA") with four investors, including Hillair pursuant to which the Company issued and sold (i) $2,080,500 in 8% Original Discount Senior Secured Convertible Debentures, for $1,825,000, with a conversion price of $0.25 per share, subject to adjustment, with a final maturity date of April 1, 2016 (the "2014 New Debentures" together with the 2014 Exchange Debentures, the "2014 Debentures"), and (ii) a five (5) year Common Stock purchase warrant to purchase up to 8,322,000 shares of the Company's common stock at an exercise price of $0.275 (110% of the conversion price), subject to adjustment with a fair value of $532,944 at issuance, which has been recorded as a discount to the 2014 New Debentures.

Senior Convertible Debentures [Member] | Frank Casano [Member]

Existing Debentures [Member]

$ 14,971

Fair value of conversion option liabilities

$ 0.25

$ 2,366

Covertible debentures maturity value

$ 1,680,000

Converion price, description

Under the terms of the Exchange Agreement, Existing Debentures with a stated maturity value of $1,680,000 were surrendered in exchange for (i) new Senior Convertible Debentures with a stated interest rate of eight percent (8%) per year, a stated maturity value of $1,915,200, a conversion price of $0.25 per share, subject to adjustment, with a final maturity date of April 1, 2016 (the ''2014 Exchange Debentures''), and (ii) a five (5) year Common Stock purchase warrant to purchase up to 7,660,800 shares of the Company's common stock at an exercise price of $0.275 (110% of the conversion price), subject to adjustment (the ''2014 Exchange Warrants'').

Bridge Debenture [Member]

$ 490,601

Nov. 03, 2015

Securities Purchase Agreement [Member]

$ 0.10

Debt instrument, covenant description

$ 69,502

The underlying securities purchase and debenture agreements also provide for the Company to pay liquidated damages in the event of its failure to (i) deliver shares upon the conversion of the debentures, in which case the liquidated damages would amount to a cash payment of $10 per trading day (increasing to $15 per trading day on the fifth trading day) for each $1,000 of principal amount being converted until such certificates are delivered (ii) maintain timely required filings with the SEC, in which case the liquidated damages would amount to a cash payment of two percent (2.0%) of the aggregate subscription amount of such purchasers securities on the day of the failure to maintain timely filings with the SEC and on every thirtieth (30th) day thereafter until the required documents are filed with the SEC or is no longer required for the purchaser to transfer the underlying shares pursuant to Rule 144 and (iii) to compensate the debenture holder for a Buy-In (as defined in the debentures) of securities previously sold by the debenture holder on a failure to timely deliver certificates upon conversion by the debenture holder.

Securities Purchase Agreement [Member] | Hillair Capital Investments Lp [Member]

199,806

$ 162,000

$ 1,120,000

8.00%

Jul. 01, 2014

Number of shares issuable upon conversion of debentures

$ 1,000,000

2,604,651

$ 120,000

Description of interest payable on unconverted outstanding principal amount of debenture

$ 0.43

The Company shall pay interest on the aggregate unconverted and then outstanding principal amount of the Debenture at 8% per annum, payable quarterly on January 1, April 1, July 1 and October 1, beginning on July 1, 2013.

Description for interest payment

Based on a share value equal to the lesser of (a) $0.43 per share, subject to adjustments upon certain events, and (b) 90% of the average of the volume weighted average price for 20 consecutive trading days prior to the applicable interest payment date, provided that the price shall be equal to at least a $0.01 discount to the volume weighted average price for the trading day that is immediately prior to the applicable interest payment date.