UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

SCHEDULE 13G 

(Rule 13d-102)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO §240.13d-1(b), (c) AND (d) AND AMENDMENTS THERETO FILED PURSUANT TO §240.13d-2

(Amendment No. __)*

Check the appropriate box to designate the rule pursuant to which this Schedule is filed:

(Page 1 of 11 Pages)

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

* Represents the total number of shares of Common Stock currently issuable under a convertible note held by Hanover Holdings I, LLC, plus the Commitment Shares (defined herein) held by Hanover Holdings I, LLC. Subject to adjustment. (See Item 4).

* Represents the total number of shares of Common Stock currently issuable under a convertible note held by Hanover Holdings I, LLC, plus the Commitment Shares (defined herein) held by Hanover Holdings I, LLC. Subject to adjustment. (See Item 4)

Item 1.

Item 2.

This Schedule 13G is being jointly filed by Hanover Holdings I, LLC, a New York limited liability company (“Hanover”), and Joshua Sason (each, a “Reporting Person” and, collectively, the “Reporting Persons”) with respect to shares of common stock, $0.001 par value, of the Issuer (the “Common Stock”) owned directly by Hanover.

The address of the principal business office of each of the Reporting Persons is: 5 Hanover Square, New York, New York 10004.

Hanover is a New York limited liability company.

Mr. Sason is a United States citizen.

Common Stock, $0.001 par value

16936C108

Item 3. If this statement is filed pursuant to §§240.13d-1(b), or 240.13d-2(b) or (c), check whether the person filing is a:

If filing as a non-U.S. institution in accordance with §240.13d-1(b)(1)(ii)(J), please specify the type of institution ______________________

Item 4. Ownership.

Provide the following information regarding the aggregate number and percentage of the class of securities of the Issuer identified in Item 1.

The information required by Item 4(a) is set forth in Row 9 of the cover page for each Reporting Person hereto and is incorporated by reference for each such Reporting Person.

The information required by Item 4(b) is set forth in Row 11 of the cover page for each Reporting Person hereto and is incorporated by reference for each such Reporting Person.

On November 7, 2013 (the “Closing Date”), the Issuer consummated the transactions contemplated by that certain securities purchase agreement (the “Purchase Agreement”) dated November 4, 2013 with Hanover.  The Purchase Agreement provided that, upon the terms and subject to the conditions set forth therein, Hanover purchased from the Issuer a senior convertible note with an initial principal amount of $450,000 (the “Initial Convertible Note”) for a purchase price of $300,000 (an approximately 15.79% original issue discount). Additionally, the Issuer has the right to require Hanover to purchase, on the 10^th trading day after the effective date of the Registration Statement (defined below) (the “Additional Closing Date”), an additional senior convertible note with an initial principal amount of $500,000 (the “Additional Convertible Note” and, together with the Initial Convertible Note, the “Convertible Notes”) for a purchase price of $500,000. The Issuer may exercise its right to require Hanover to purchase the Additional Convertible Note on the Additional Closing Date by delivering to Hanover, on, or within 10 days following, the effective date of the Registration Statement, an irrevocable written notice that the Issuer has exercised its right to require Hanover to purchase the Additional Convertible Note. Pursuant to the Purchase Agreement, on the Closing Date, the Issuer issued the Initial Convertible Note to Hanover.

With respect to the Initial Convertible Note, $50,000 of the outstanding principal amount of the Initial Convertible Note (together with any accrued and unpaid interest with respect to such portion of the principal amount) will be automatically extinguished (without any cash payment by the Issuer) if (i) the Issuer has properly filed the Registration Statement with the Securities and Exchange Commission (“SEC”) on or prior to the Filing Deadline (defined below) covering the resale by Hanover of shares of the Issuer’s common stock, par value $0.001 per share (the “Common Stock”) issued or issuable upon conversion of the Convertible Notes and (ii) no event of default, or an event that with the passage of time or giving of notice would constitute an event of default, has occurred on or prior to such date. Moreover, $100,000 of the outstanding principal amount of the Initial Convertible Note (together with any accrued and unpaid interest with respect to such portion of the principal amount) shall be automatically extinguished (without any cash payment by the Issuer) if (i) the Registration Statement filed by the Issuer is declared effective by the SEC on or prior to the Effectiveness Deadline (defined below) and the prospectus contained therein is available for use by Hanover for the resale by Hanover of the shares of Common Stock issued or issuable upon conversion of the Convertible Notes and (ii) no event of default, or an event that with the passage of time or giving of notice would constitute an event of default, has occurred on or prior to such date.

The Initial Convertible Note matures on November 7, 2014 (subject to extension as provided in the Initial Convertible Note) and, in addition to the approximately 15.79% original issue discount, accrues interest at the rate of 4.0% per annum. If issued, the Additional Convertible Note will mature on the date that is the one-year anniversary of the date of issuance of the Additional Convertible Note (subject to extension as provided in the Initial Convertible Note) and will accrue interest at the rate of 4.0% per annum. The Initial Convertible Note is convertible at any time, in whole or in part, at Hanover’s option, into shares Common Stock, at a conversion price equal to the Variable Conversion Price. “Variable Conversion Price” means, as of any date of determination, the product of (A) the lowest volume weighted average price of the Common Stock of any of the five consecutive trading days ending and including the trading day immediately preceding such date of determination (subject to adjustment) (the “Variable Conversion Base Price”) and (B) the applicable Variable Percentage. “Variable Percentage” means (i) if the applicable Variable Conversion Base Price is less than or equal to $0.45 (subject to adjustment), 85% or (ii) if the applicable Variable Conversion Base Price is greater than $0.45 (subject to adjustment), 80%. If issued, the Additional Convertible Note will be convertible at any time, in whole or in part, at Hanover’s option into shares of Common Stock at a conversion price that will be equal to the Variable Conversion Price. At no time will Hanover be entitled to convert any portion of the Convertible Notes to the extent that after such conversion, Hanover (together with its affiliates) would beneficially own more than 9.99% of the outstanding shares of Common Stock as of such date. Further, in no event will the Convertible Notes be converted into a number of shares that, in the aggregate, amount to greater than 19.99% of the currently issued and outstanding shares of Common Stock. In the event that Hanover desires to convert one or both of the Convertible Notes and such conversion would lead to a number of shares being issued pursuant to the Convertible Notes in excess of 19.99%, the Issuer will pay cash in exchange for the cancellation of such shares of Common Stock at a price equal to the sum of (i) the product of (x) such number of Exchange Cap Shares (as defined in the Convertible Notes) and (y) the closing sale price on the trading day immediately preceding the date such Exchange Cap Shares would otherwise be required to be delivered to Hanover thereunder and (ii) to the extent that Hanover purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by Hanover of Exchange Cap Shares, any brokerage commissions and other out-of-pocket expenses, if any, of Hanover incurred in connection therewith.

The Initial Convertible Note includes and, if issued, the Additional Convertible Note will include, customary Event of Default provisions. The Initial Convertible Note provides and, if issued, the Additional Convertible Note will provide for a default interest rate of 18%. Upon the occurrence of an Event of Default, Hanover may require the Issuer to pay in cash the “Event of Default Redemption Price” which is defined in the Convertible Notes to mean the greater of (i) the product of (A) the amount to be redeemed multiplied by (B) 130% (or 100% if an insolvency related event of default) and (ii) the product of (X) the conversion price in effect at that time multiplied by (Y) the product of (1) 130% (or 100% if an insolvency related event of default) multiplied by (2) the greatest closing sale price of the Common Stock on any trading day during the period commencing on the date immediately preceding such event of default and ending on the date the Issuer makes the entire payment required to be made under this provision.

The Issuer has the right at any time to redeem all, but not less than all, of the total outstanding amount then remaining under the Initial Convertible Note and/or the Additional Convertible Note in cash at a price equal to 125% of the total amount of such Convertible Note then outstanding.

The Issuer agreed to pay to Hanover a commitment fee for entering into the Purchase Agreement equal to $24,000 (or 3.0% of the total purchase price for the Convertible Notes under the Purchase Agreement) in the form of 47,022 shares of Common Stock (the “Commitment Shares”), calculated using a per share price of $0.5104, representing the average of the daily volume weighted average prices of a share of Common Stock for the three trading days immediately preceding the Closing Date. The Issuer also agreed to pay up to $35,000 of reasonable attorneys’ fees and expenses incurred by Hanover in connection with the transaction.

The Purchase Agreement contains customary representations, warranties and covenants by, among and for the benefit of the parties. The Purchase Agreement also provides for indemnification of Hanover and its affiliates in the event that Hanover incurs losses, liabilities, obligations, claims, contingencies, damages, costs and expenses related to a breach by the Issuer of any of its representations, warranties or covenants under the Purchase Agreement.

In connection with the execution of the Purchase Agreement, on the Closing Date, the Issuer and Hanover also entered into a registration rights agreement dated as of the Closing Date (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Issuer has agreed to file an initial registration statement (“Registration Statement”) with the SEC to register the resale of the Common Stock into which the Convertible Note may be converted, on or prior to December 23, 2013 (the “Filing Deadline”) and have it declared effective at the earlier of (i) the 120^th calendar day after the Closing Date and (ii) the fifth business day after the date the Issuer is notified by the SEC that such Registration Statement will not be reviewed or will not be subject to further review (the “Effectiveness Deadline”).  

If at any time all of the shares of Common Stock underlying the Convertible Note are not covered by the initial Registration Statement, the Issuer has agreed to file with the SEC one or more additional Registration Statements so as to cover all of the shares of Common Stock underlying the Convertible Note not covered by such initial Registration Statement, in each case, as soon as practicable, but in no event later than the applicable filing deadline for such additional Registration Statements as provided in the Registration Rights Agreement.

The Issuer also agreed, among other things, to indemnify Hanover from certain liabilities and fees and expenses of Hanover incident to the Issuer’s obligations under the Registration Rights Agreement, including certain liabilities under the Securities. Hanover has agreed to indemnify and hold harmless the Issuer and each of its directors, officers and persons who control the Issuer against certain liabilities that may be based upon written information furnished by Hanover to the Issuer for inclusion in a registration statement pursuant to the Registration Rights Agreement, including certain liabilities under the Securities Act.

Mr. Sason is the Chief Executive Officer of Hanover and owns all of the membership interests in Hanover. Accordingly, Mr. Sason has sole power to vote or to direct the vote and sole power to dispose or to direct the disposition of all securities owned directly by Hanover, including, without limitation, the Common Stock. Mr. Sason does not directly own any shares of Common Stock. Under Rule 13d-3 under the Exchange Act, Mr. Sason may be deemed to beneficially own the shares of Common Stock owned directly by Hanover. Hanover is not a registered broker-dealer, and neither Hanover nor any of its affiliates is an affiliate or an associated person of a registered broker-dealer.

Item 5. Ownership of Five Percent or Less of a Class.

If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following [ ].

Item 6. Ownership of More Than Five Percent on Behalf of Another Person.

Not Applicable

Item 7. Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on By the Parent Holding Issuer.

Not Applicable

Item 8. Identification and Classification of Members of the Group.

Not Applicable

Item 9. Notice of Dissolution of Group.

Not Applicable

Item 10. Certification.

By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the Issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: November 25, 2013

EXHIBIT INDEX TO SCHEDULE 13G

EXHIBIT 1

Joint Filing Agreement, dated as of November 25, 2013, by and between Hanover Holdings I, LLC and Joshua Sason.

Exhibit 1

Joint Filing Agreement

This Joint Filing Agreement, entered into and effective as of November 25, 2013, is made by and between Hanover Holdings I, LLC and Joshua Sason (each, a “Filer” and, collectively, the “Filers”) pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended.

Each of the Filers hereby acknowledges and agrees that the foregoing statement on Schedule 13G (the “Schedule 13G”) is filed on behalf of each of the Filers and that all subsequent amendments to the Schedule 13G shall be filed on behalf of each of the Filers without the necessity of filing additional joint filing agreements. Each Filer acknowledges that such Filer shall be responsible for the timely filing of such amendments and for the completeness and accuracy of the information concerning such Filer contained therein, but shall not be responsible for the completeness and accuracy of the information concerning any of the other Filers, except to the extent that such Filer knows or has reason to believe that such information is inaccurate. Each Filer consents to the filing of this Joint Filing Agreement as an exhibit to the Schedule 13G.

This Joint Filing Agreement may be executed in any number of counterparts and all of such counterparts taken together shall constitute one and the same instrument.

This Joint Filing Agreement may be terminated by any of the Filers upon written notice to the other Filers.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of the date set forth above.