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and Ascendiant Capital Partners, LLC&lt;/i&gt;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;On May 31, 2013, the Company paid $250,000 plus
interest of $35,175 under the Amendment to Warrant Purchase Agreement with Gemini dated January 23, 2013. The Company has acquired
the warrant from Gemini and cancelled it.&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;On June 26, 2013, the Company acquired all additional
investment rights (&amp;#147;AIR&amp;#148;) between the Company and Gemini under the AIR Agreement dated January 23, 2013 with the payment
of $850,000 and interest of $17,349.&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;The Company&amp;#146;s equity line of credit with
Ascendiant remains outstanding, with available credit of $2,516,859. The Company has no current intention to utilize this line
of credit, which expires August 29, 2013.&lt;/p&gt;

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 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 505

 -SubTopic 10

 -Section 50

 -Paragraph 3

 -URI http://asc.fasb.org/extlink&amp;oid=6928386&amp;loc=d3e21475-112644



Reference 2: http://www.xbrl.org/2003/role/presentationRef

 -Publisher SEC

 -Name Regulation S-X (SX)

 -Number 210

 -Section 02

 -Paragraph 19, 20, 22

 -Article 5



Reference 3: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 210

 -SubTopic 10

 -Section S99

 -Paragraph 1

 -Subparagraph (SX 210.5-02.19,20,22)

 -URI http://asc.fasb.org/extlink&amp;oid=6877327&amp;loc=d3e13212-122682



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