0001014897-16-000625.txt : 20160818 0001014897-16-000625.hdr.sgml : 20160818 20160818172438 ACCESSION NUMBER: 0001014897-16-000625 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 53 CONFORMED PERIOD OF REPORT: 20160331 FILED AS OF DATE: 20160818 DATE AS OF CHANGE: 20160818 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Global Arena Holding, Inc. CENTRAL INDEX KEY: 0001138724 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 330931599 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-49819 FILM NUMBER: 161841571 BUSINESS ADDRESS: STREET 1: 850 THIRD AVENUE STREET 2: SUITE 16C CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-508-4700 MAIL ADDRESS: STREET 1: 850 THIRD AVENUE STREET 2: SUITE 16C CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: China Stationery & Office Supply, Inc. DATE OF NAME CHANGE: 20060719 FORMER COMPANY: FORMER CONFORMED NAME: DICKIE WALKER MARINE INC DATE OF NAME CHANGE: 20010419 10-Q 1 globalarena10q1q16v3.htm FORM 10-Q Global Arena Holdings, Inc. Form 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q


[x]     Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended March 31, 2016

-OR-

[ ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _________ to________


Commission File Number  000-49819


Global Arena Holding, Inc.

 (Exact name of registrant as specified in its charter)


 

 

 

Delaware

 

33-0931599

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)


850 Third Avenue, Suite 16C

New York, NY

 

10022

(Address of principal executive offices)

 

(Zip Code)


(646) 801-6146

 (Registrant's telephone number, including area code)


Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  [x]   No [ ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes [x]   No [ ]




1



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerate filer, or a small reporting company as defined by Rule 12b-2 of the Exchange Act):


Large accelerated filer        [  ]

 

Non-accelerated filer             [  ]

Accelerated filer                 [  ]

 

Smaller reporting company   [x]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  [ ]      No [x]


The number of outstanding shares of the registrant's common stock,

August 18, 2016:  Common Stock  -  76,794,887




2



GLOBAL ARENA HOLDING, INC.

FORM 10-Q

For the three months ended March 31, 2016

INDEX


PART 1 – FINANCIAL INFORMATION

 

 

 

 

 

Page

Item 1.  Financial Statements (Unaudited)

 

5

Item 2.  Management's Discussion and Analysis of

  Financial Condition and Results of Operations

 

26

Item 3.  Quantitative and Qualitative Disclosure

  About Market Risk

 

32

Item 4.  Controls and Procedures

 

32


PART II – OTHER INFORMATION



 

 

 

Item 1.  Legal Proceedings

 

34

Item 1A.  Risk Factors

 

35

Item 2.  Unregistered Sales of Equity Securities and

  Use of Proceeds

 

36

Item 3.  Defaults upon Senior Securities

 

36

Item 4.  Mine Safety Disclosures

 

36

Item 5.  Other Information

 

36

Item 6.  Exhibits

 

36

 

 

 

SIGNATURES

 

37





3



PART I – FINANCIAL INFORMATION

 

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934.  These statements are based on management’s beliefs and assumptions, and on information currently available to management.  Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider,” or similar expressions are used.

 

Forward-looking statements are not guarantees of future performance.  They involve risks, uncertainties, and assumptions.  Our future results and shareholder values may differ materially from those expressed in these forward-looking statements.  Readers are cautioned not to put undue reliance on any forward-looking statements.





4



GLOBAL ARENA HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


 

 

 

 

 

March 31,

 

December 31,

 

 

 

 

 

2016

 

2015

 

 

 

 

 

(unaudited)

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 Cash  

 

 $

7,228

$

48,400

 

 Prepaid expenses and other current assets

 

-

 

20,200

 

 

 Total current assets

 

7,228

 

68,600

 

 

 

 

 

 

 

 

Security deposits

 

 

10,500

 

10,500

Deposit for proposed acquisition

 

30,000

 

20,000

Investment

 

 

284,270

 

284,270

Other assets

 

 

14,265

 

13,567

 

 TOTAL ASSETS

 $

346,263

$

396,937


Continued on next page



5



GLOBAL ARENA HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

Continued from previous page


LIABILITIES AND STOCKHOLDERS' DEFICIT

 

March 31,

 

December 31,

 

 

 

 

 

2016

 

2015

 Current Liabilities:

 

(Unaudited)

 

 

 

 Accounts payable and accrued expenses

$

1,141,196

$

1,124,612

 

 Convertible promissory notes payable, in default

 

50,000

 

280,000

 

 Convertible promissory notes payable,  

 

 

 

 

 

    net of debt discount of $265,229  and $76,789

 

1,572,396

 

1,270,829

 

 Promissory notes payable, in default

 

230,000

 

230,000

 

 Deferred revenue

 

154,630

 

387,410

 

 Derivative liability

 

1,487,042

 

1,020,408

 

 

 Total current liabilities

 

4,635,264

 

4,313,259

 

 

 

 

 

 

 

 

Convertible promissory notes payable,

 

 

 

 

   net of debt discount of $287,047 and $286,965

 

237,953

 

213,035

 

 TOTAL LIABILITIES

 

4,873,217

 

4,526,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 STOCKHOLDERS' DEFICIT

 

 

 

 

 

 Preferred stock, $0.0001 par value; 10,000,000 shares authorized;

 

 

 

 

 

 

 none issued and outstanding

 

-

 

-

 

 Common stock, $0.001 par value; 1,000,000,000 shares authorized;

 

 

 

 

 

 

 55,709,983 and 50,628,209 shares issued and outstanding

 

55,710

 

50,628

 

 Additional paid-in capital

 

13,138,718

 

13,045,187

 

 Accumulated deficit

 

(17,721,382)

 

(17,225,172)

 

 

 Total stockholders' deficit

 

(4,526,954)

 

(4,129,357)

 

 TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 $

346,263

$

396,937


See notes to consolidated financial statements.



6



GLOBAL ARENA HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015

(UNAUDITED)

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

2016

 

2015

Revenues:

 

 

 

 

 

 

 

Services

 

 

$

666,532

$

10,655

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Salaries and benefits

 

 

61,730

 

69,385

 

Occupancy

 

 

 

13,389

 

43,742

 

Business development

 

 

110,139

 

90,856

 

Professional fees

 

 

124,529

 

179,737

 

Stock-based compensation

 

-

 

5,273

 

Office and other

 

 

265,569

 

15,327

 

     Total operating expenses

 

575,356

 

404,320

 

 

 

 

 

 

 

 

Loss from operations

 

 

91,176

 

(393,665)

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

Interest expense and financing costs

 

(757,725)

 

(340,250)

 

Change in fair value of derivative liability

 

170,339

 

(386,300)

 

     Total operating expenses

 

(587,386)

 

(726,550)

 

 

 

 

 

 

 

 

Loss before provision for taxes

 

(496,210)

 

(1,120,215)

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

-

 

 

 

 

 

 

 

 

Net loss

 

 

$

(496,210)

$

(1,120,215)

 

 

 

 

 

 

 

 

Income attributable to noncontrolling interests

 

-

 

2,209

 

 

 

 

 

 

 

 

Net loss attributed to common stockholders

$

(496,210)

$

(1,122,424)

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic and diluted

 

52,872,664

 

24,136,693

 

 

 

 

 

 

 

 

Loss per share - basic and diluted

$

(0.01)

$

(0.05)


See notes to consolidated financial statements.



7



GLOBAL ARENA HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015

(UNAUDITED)

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

2016

 

2015

OPERATING ACTIVITIES:

 

 

 

 

 

Net loss

$

(496,210)

$

(1,120,215)

 

Adjustments to reconcile net loss to

 

 

 

 

 

   net cash used in operating activities:

 

 

 

 

 

 

 

Amortization of debt discount

 

100,255

 

187,062

 

 

 

Stock-based compensation

 

-

 

5,273

 

 

 

Change in fair value of derivative liability

 

(170,339)

 

386,300

 

 

 

Non-cash financing costs

 

341,898

 

-

 

 

 

Convertible promissory notes payable issued for penalty interest

194,137

 

-

 

 

 

Debt modification expense

 

52,306

 

-

 

 

Change in current assets and liabilities:

 

 

 

 

 

 

 

Prepaid expenses and other current assets

20,200

 

12,889

 

 

 

Deferred revenue

 

(232,780)

 

91,100

 

 

 

Accounts payable and accrued expenses

 

52,559

 

248,229

 

Net cash used in operating activities

 

(137,974)

 

(189,362)

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchase of other assets

 

(698)

 

-

 

 

Payment of deposit for acquisition

 

(10,000)

 

-

 

 

Advances from related parties

 

-

 

7,300

 

Net cash provided by (used in) investing activities

 

(10,698)

 

7,300

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

Bank overdraft

 

-

 

32,244

 

 

Proceeds from promissory notes payable

 

-

 

175,000

 

 

Proceeds from convertible promissory notes payable

167,500

 

 

 

 

Repayment of convertible promissory notes payable

(60,000)

 

-

 

Net cash provided by financing activities

 

107,500

 

207,244

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

(41,172)

 

25,182

 

 

 

 

 

 

 

 

CASH, BEGINNING BALANCE

 

48,400

 

54,977

CASH, ENDING BALANCE

$

7,228

$

80,159


(Continued on next page)



8



GLOBAL ARENA HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015

(UNAUDITED)


CASH PAID FOR:

 

2016

 

2015

 

Interest

$

-

$

50

 

Income taxes

$

-

$

-

 

 

 

 

 

 

 

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

Allocated value of warrants and beneficial conversion features related to debt

$

630,675

$

143,827

 

Promissory note issued for consulting services

$

-

$

188,000

 

Debt converted to common stock

$

27,530

$

-

 

Accrued interest added to debt

$

10,900

$

-


See notes to consolidated financial statements.




9



GLOBAL ARENA HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015

(UNAUDITED)


1.  ORGANIZATION


Organization and Business


Global Arena Holding, Inc. (formerly, “Global Arena Holding Subsidiary Corp.”) (“GAHI”), was formed in February 2009, in the state of Delaware.  GAHI and its subsidiaries (the “Company”) was previously a financial services firm and currently is focusing on the following businesses through these subsidiaries:


On February 25, 2015, Global Election Services, Inc. (“GES”), a wholly owned subsidiary was incorporated in the State of Delaware. GES provides comprehensive technology-enabled election services primarily for organized labor associations.


On May 20, 2015, the Company incorporated a wholly owned subsidiary in the State of Delaware called “GAHI Acquisition Corp.”  This entity is to be the merger subsidiary for the potential acquisition of Blockchain Technologies Corp.


Global Arena Investment Management LLC (“GAIM”), a wholly owned subsidiary, provided investment advisory services to its clients.  GAIM was formally registered with the SEC as an investment advisor. This subsidiary is currently inactive.


Global Arena Commodities Corporation (“GACOM”), which is 100% owned by GAHI, ceased all operations in 2014 and the Company plans to close GACOM in 2016.


Basis of Presentation


The unaudited condensed consolidated financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission.  The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the financial condition of the Company and its operating results for the respective periods. The condensed consolidated balance sheet at December 31, 2015 has been derived from the Company's audited consolidated financial statements. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and



10



regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission. The results for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016.


Going Concern


The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates the continuation of the Company as a going concern. The Company has generated recurring losses and cash flow deficits from its continuing operations since inception and has had to continually borrow to continue operating. In addition, with the sale of Global Arena Capital Corp. in August 2014, which was the Company’s principal operating business, the Company’s continuing operations are insufficient to support its ongoing activities. In addition, certain of the Company’s debt went into default and required extensions and adjustments to previously issued warrants and conversion prices.  Certain debt continues to be in default as of March 31, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or acquire or develop a business that generates sufficient positive cash flows from operations.  In May, 2015, the Company entered into an agreement and plan of merger with Blockchain Technologies Corporation (“BTC”), which holds provisional patents and intellectual property for creating a new 3D Blockchain technology. In October, 2015, the Company acquired 10% of the outstanding equity in BTC. The management of the Company is also in negotiations with other companies it believes could be beneficial to the Company’s operations. The Company continues to raise funds from the issuance of additional convertible promissory note. Management is hopeful that with its new focus on business acquisitions and their ability to raise additional funds that the Company should be able to continue as a going concern.


The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.




11



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Principles of Consolidation


The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of GAHI and its wholly-owned and majority owned subsidiaries, GES, GAHI Acquisition Corp., GAIM, and GACOM.  All significant intercompany accounts and transactions have been eliminated in consolidation.  


Basic and Diluted Earnings (Loss) Per Share


Earnings per share is calculated in accordance with the ASC 260-10, Earnings Per Share. Basic earnings-per-share is based upon the weighted average number of common shares outstanding. Diluted earnings-per-share is based on the assumption that all dilutive convertible notes, stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.  The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.


 

March 31, 2016

March 31, 2015

Options

3,000,000

2,075,000

Warrants

65,670,263

38,136,449

Convertible notes

134,318,946

9,585,586

Total

202,989,209

49,797,035


Management Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.  Significant estimates reflected in the consolidated financial statements include, but are not limited to, share-based compensation, and assumptions used in valuing derivative liabilities. Actual results could differ from those estimates.


Cash and Cash Equivalents


The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents.  




12



Convertible Debt


Convertible debt is accounted for under FASB ASC 470, Debt – Debt with Conversion and Other Options. The Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital.  The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing stock options, except that the contractual life of the warrant is used.  


Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis.  The allocated fair value of the BCF and warrants are recorded as a debt discount and is accreted over the expected term of the convertible debt as interest expense.  


The Company accounts for modifications of its embedded conversion features in accordance with the ASC which requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.


Derivative Financial Instruments

 

The Company evaluates its financial instruments 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 in the statements of operations. The Company uses the Black-Scholes-Merton model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.  


Revenue Recognition


The Company’s revenue recognition policies comply with SEC revenue recognition rules and the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-10-S99. The Company earns revenues through various services it provides to its clients. GES’s income is recognized at the presentation date of the certification of the election results. The payments received in advance are recorded as deferred revenue on the balance sheet. Should an election not proceed, all non-refundable deferred revenue will be recognized as revenue.




13



Share-Based Compensation


The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company's Statements of Operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance where the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates.


Fair Value of Financial Instruments


FASB ASC 820, Fair Value Measurement defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability.  The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.


Fair Value Measurements


The Company applies the provisions of ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:


  

·

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.


  

·

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.


  

·

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.




14



Cash, accounts receivable, cash overdraft, accounts payable and accrued expenses and deferred revenue – The carrying amounts reported in the consolidated balance sheets for these items are a reasonable estimate of fair value due to their short term nature.


Promissory notes payable and convertible promissory notes payable – Promissory notes payable and convertible promissory notes payable are recorded at amortized cost.  The carrying amount approximates their fair value.


The Company uses Level 2 inputs for its valuation methodology for the beneficial conversion feature and warrant derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.


The following table presents the Company’s assets and liabilities required to be reflected within the fair value hierarchy as of March 31, 2016 and December 31, 2015.


 

 

Fair Value

 

Fair Value Measurements at

 

 

As of

 

March 31, 2016

Description

 

March 31, 2016

 

Using Fair Value Hierarchy

 

 

 

 

Level 1

 

Level 2

 

Level 3

Beneficial conversion feature

$

1,355,942

$

-

$

1,355,942

$

-

Warrant derivative  

 

131,100

 

 

 

131,100

 

 

 

 

 

 

 

 

 

 

 

Total

$

1,487,042

$

-

$

1,487,042

$

-



 

 

Fair Value

 

Fair Value Measurements at

 

 

As of

 

December 31, 2015

Description

 

December 31, 2015

 

Using Fair Value Hierarchy

 

 

 

 

Level 1

 

Level 2

 

Level 3

Beneficial conversion feature

$

611,200

$

-

$

611,200

$

-

Warrant derivative  

 

409,208

 

 

 

409,208

 

 

 

 

 

 

 

 

 

 

 

Total

$

1,020,408

$

-

$

1,020,408

$

-




15



Income Taxes


The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.


Recently Issued Accounting Pronouncements


In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. This pronouncement is effective for annual reporting periods beginning after December 15, 2016, and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements.

In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

 



16



In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

 

In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.  In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.

 

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not anticipate the adoption of this ASU will have a significant impact on its consolidated financial position, results of operations, or cash flows.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements.




17



In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting, to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of this newly issued guidance to its consolidated financial statements.


Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.


NOTE 3 - INVESTMENT


On October 20, 2015, the Company paid $125,000 in cash and issued to Nikolaos Spanos, 1,377,398 of its common stock (valued at $68,870) and 1,993,911 warrants to purchase its common shares at the exercise price of $0.10 per common share exercisable for three years (valued at $90,400).  The common shares and warrants are being issued for the purchase of 1,000,000 common shares of Blockchain Technologies Corporation (“BTC”).  Said common shares represent ten percent (10%) of the outstanding equity in BTC.  This investment is accounted for under the cost method.


NOTE 4 - PROMISSORY NOTES PAYABLE


In March 2014, the Company issued two promissory notes for a total of $230,000. The interest rate is the short-term applicable federal rate as determined by the Internal Revenue Service for the calendar month plus 10%. These two promissory notes were expired on September 14, 2015 and are in default as of March 31, 2016.




18



NOTE 5 - CONVERTIBLE PROMISSORY NOTES PAYABLE


Convertible promissory notes payable at March 31, 2016 and December 31, 2015 consist of the following:


 

 

March 31, 2016

 

December 31, 2015

Convertible promissory notes with interest at 12% per annum, convertible into common shares at a fixed price ranging from $0.02 to $0.10 per share. Maturity dates range from April 30, 2016 to November 11, 2018

$

1,492,500

$

1,262,500

Convertible promissory notes with interest at 12% per annum, convertible into common shares at a fixed price ranging from $0.06 to $0.14 per share. These convertible promissory notes are currently in default. (default as of March 31, 2016)

 

50,000

 

280,000

Convertible promissory notes with interest at 12% per annum, convertible into common shares at a price ranging from $0.08 to $0.14 or a 50% discount from the lowest trade price in the 20 trading days prior to conversion (as of March 31, 2016 the conversion price would be $0.0081 per share)

 

742,625

 

335,118

Convertible promissory notes with interest at 8% per annum, convertible into common shares at a fixed price of $0.02 per share. The maturity date is April 30, 2016.

 

250,000

 

250,000

Total convertible promissory notes payable

 

2,535,125

 

2,127,618

Unamortized debt discount

 

(552,276)

 

(363,754)

Convertible promissory notes payable, net discount

 

1,982,849

 

1,763,864

Less notes receivable collateralized by convertible promissory notes payable

 

(122,500)

 

-

 

 

1,860,349

 

1,763,864

Less current portion

 

(1,622,396)

 

(1,550,829)

Long-term portion

$

237,953

$

213,035




19



During the three months ended March 31, 2016, the Company issued four convertible promissory notes payable totaling $245,000 to one investor for which the Company received $122,500 in cash and notes receivable from the same investor totaling $122,500.  Since the notes receivable were issued to the Company as payment for certain convertible promissory notes payable, the Company has not presented these notes receivable as an asset, but as an offset to the convertible promissory notes payable balance. In addition to the above four convertible promissory notes payable, during the three months ended March 31, 2016, the Company issued two additional convertible promissory notes payable to two other investors for gross proceeds of $45,000.


A rollforward of the convertible promissory notes payable from December 31, 2015 to March 31, 2016 is below:


Convertible promissory notes payable, December 31, 2015

$

1,763,864

Issued for cash

 

167,500

Issued for penalty interest

 

194,137

Issued for capitalized interest

 

10,900

Repayment for cash

 

(60,000)

Conversion to common stock

 

(27,530)

Debt discount related to new convertible promissory notes

(288,777)

Amortization of debt discounts

 

100,255

Convertible promissory notes payable, March 31, 2016

$

1,860,349




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NOTE 6 - DERIVATIVE FINANCIAL INSTRUMENTS


On December 31, 2012, in connection with an extension of the maturity date of certain convertible notes which were due on May 31, 2012, the Company issued the holder a warrant to purchase shares of common stock of the Company not exceeding 9.99% of the issued and outstanding shares and potential issuable shares related to outstanding options, warrants and convertible debt of the Company. The Company determined that the anti-dilution provision feature of the warrants to be an embedded derivative instrument.  This derivative is adjusted to fair value at each balance sheet with the changes in fair value recognized in operations.   In addition, certain of the Company’s convertible promissory notes payable are convertible into shares of the Company’s common stock at a percentage of the market price on the date of conversion.  The Company has determined that the variable conversion rate is an embedded derivative instrument. The Company uses the Black-Scholes valuation method to value the derivative instruments at inception and on subsequent valuation dates. Weighted average assumptions used to estimate fair values are as follows:


 

 

March 31, 2016

 

December 31, 2015

Risk-free interest rate

 

0.59%

 

0.16%

Expected life of the options (Years)

 

0.55

 

0.25

Expected volatility

 

411%

 

211%

Expected dividend yield

 

0%

 

0%

 

 

 

 

 

Fair Value

$

1,487,042

$

1,020,408


For the three months ended March 31, 2016 and 2015, the Company recognized a change in this derivative liability of $170,339 and $(386,300), respectively, in other income (expense).


NOTE 7- STOCKHOLDERS’ DEFICIT


Common Stock


On April 28, 2016 the stockholders approved an amendment to the Company’s articles of incorporation to increase the number of authorized common shares from 100,000,000 to 1,000,000,000. In addition, the stockholders also approved an amendment to the Company’s Stock Awards Plan, originally filed June 27, 2011, which will increase the number of shares authorized to be issued under the Plan from 3,000,000 shares to 7,460 ,000 shares.


During the three months ended March 31, 2016, the Company issued 5,081,774 shares of common stock for convertible promissory notes payable of $27,530.




21



During the three months ended March 31, 2016, the Company extended the due date of certain convertible promissory notes payable.  In consideration of extending the due dates, the Company lowered the conversion price for certain convertible promissory notes payable and lowered the exercise price of certain warrants.  The Company took a charge to earnings of $52,306 which represents the change in fair value of the conversion features and warrants between the old terms and the new terms.


Option Activity


A summary of the option activity is presented below:


 

 

 

Weighted

 

 

 

Weighted

Average

 

 

 

Average

Remaining

Aggregate

 

Number of

Exercise

Contractual

Intrinsic

 

Options

Price ($)

Life (in years)

Value ($)

Outstanding, December 31, 2015

3,000,000

0.07

4.63

-

Granted

-

 

 

 

Exercised

-

 

 

 

Forfeited/Canceled

-

 

 

 

Outstanding, March 31, 2016

3,000,000

0.07

4.38

-

Exercisable, March 31, 2016

3,000,000

0.07

4.38

-


Warrant Activity


A summary of warrant activity is presented below:


 

 

 

Weighted

 

 

 

Weighted

Average

 

 

 

Average

Remaining

Aggregate

 

Number of

Exercise

Contractual

Intrinsic

 

Warrants

Price ($)

Life (in years)

Value ($)

Outstanding, December 31, 2015

64,586,931

0.15

2.33

666,279

Granted

1,083,332

 

 

 

Exercised

-

 

 

 

Forfeited/Canceled

-

 

 

 

Outstanding, March 31, 2016

65,670,263

0.14

2.09

146,609

Exercisable, March 31, 2016

65,670,263

0.14

2.09

146,609




22



During the three months ended March 31, 2016, the Company issued a total of 1,083,332 warrants in connection with a new convertible note and an extension to an existing convertible note. The fair values of the warrants were determined using the Black-Scholes option pricing model with the following assumptions:


Expected life of 3.0 years

Volatility of 439%;

Dividend yield of 0%;

Risk free interest rate of 1.05%


NOTE 8 - COMMITMENTS AND CONTINGENCIES


The Company may be involved in legal proceedings in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.


On October 10, 2013, GACOM settled a complaint with the National Futures Association for a fine of $50,000 for certain noncompliance with Commodity Futures Trading Commission regulations.  The fine has not been paid and is included in accounts payable and accrued expenses at March 31, 2106 and December 31, 2015.  


Named directors, officers, employees and/or registered representatives of GACC have been called before FINRA for on-the-record interviews in connection with certain FINRA inquiries. GACC has responded to multiple requests for documents and FINRA has taken on-the-record testimony. On October 27, 2014, FINRA indicated that it might recommend enforcement proceedings against GACC, our chairman John Matthews and Brian Joseph Hagerman, the former president and chief compliance officer of GACC. FINRA’s action is commonly referred to as a “Wells Notice” and is a preliminary determination by FINRA staff to recommend disciplinary action against GACC and these individuals.  FINRA is not proposing disciplinary action against the Company.  The allegations are against GACC and these individuals and assert that there were violations of Sections 17(a)(2) and 5 of the Securities Act of 1933 (“Securities Act”); NASD Rules 3010 and 3040; and FINRA Rules 2010, 5122(b)(2) and 5122(b)(1)(B).  GACC and Messrs. Matthews and Hagerman are responding to this Wells Notice and believe that they have meritorious arguments.


On April 10, 2014, the Legal Section of FINRA formally notified GACC that it had made a preliminary determination to recommend that disciplinary action be brought against GACC for (1) failing to buy and sell corporate bonds at prices that were fair; and (2) failing to have in place a supervisory system that was reasonably designed to achieve compliance with applicable securities laws and regulations and FINRA rules.  GACC has responded and intends to contest this matter.




23



On February 11, 2015, John S. Matthews was advised by the staff of FINRA’s Department of Enforcement (the “Staff”) that they intended to recommend that FINRA commence a disciplinary action against Mr. Matthews, in his former capacity as an executive of GACC for a violation of FINRA Rules 2010 and 8210 by failing to provide information to the Staff in what the Staff considered to be a timely manner. Mr. Matthews provided additional materials to FINRA subsequent to the February 11, 2015 notice and submitted a response to the Staff’s allegations on February 25, 2015, disputing the proposed charges against him. Mr. Matthews has at all times cooperated with the Staff’s inquiries and continues to do so.


On December 1, 2015, John S. Matthews, the chief executive officer and director, signed a "Letter of Acceptance, Waiver and Consent ("AWC") with FINRA consenting to the entry of findings by FINRA, without admitting or denying any wrongdoing, that he did not provide any written disclosures to, or receive any written approval from, his member firm prior to selling promissory notes issued by the Company, some of the investors were not qualified purchasers as defined in Section 2(a)(51)(A) of the Investment Company Act, and the sales were not exempt from the requirements of FINRA Rule 5122, and he willfully failed to disclose an unsatisfied $25,590 federal tax lien within 30 days.   The AWC was accepted by FINRA on December 2, 2015.


As a result of the AWC, Mr. Matthews is subject to a six-month suspension from association with any FINRA member, and a fine of $25,000.  As such, Mr. Matthews is statutorily disqualified with respect to association with a FINRA member.


As a result of the AWC, the registrant is statutorily disqualified from relying in the future on certain exemptions from registration of its securities promulgated under Rule 506 of the Securities Act of 1933 (the "Act") for the length of the suspension as long as Mr. Matthews remains an officer and/or director and/or holder of 10% or more of the voting securities of the registrant.


On November 5, 2015, one of the Company’s prior attorneys commenced an action against GAHI, seeking payment of $27,518 in unpaid legal fees. This amount is included in accounts payable. At this time, management is unable to determine what the ultimate outcome of these proceedings will be and whether there will be a material impact on the Company’s operations or the consolidated financial statements.


On December 23, 2014, one of the Company’s prior attorneys commenced an action against GACC, GAHI, and PMC Capital seeking payment of $150,019 in unpaid legal fees. This amount is included in accounts payable. At this time, management is unable to determine what the ultimate outcome of these proceedings will be and whether there will be a material impact on the Company’s operations or the consolidated financial statements.


On July 2, 2014, an action was commenced by a group of individuals against GACC, the Company, and the chief executive officer of the Company, which asserts claims for minimum wage and overtime violations under New York State Labor Law, and seeks damages in an amount to be determined at trial, plus interest, attorneys’ fees and costs. At this time, the Company is unable to determine the ultimate outcome of the demand or whether it will result in a formal proceeding or action against the Company or any of its officers.




24



The Company and certain of its officers were named in connection with a demand for repayment of $695,000 by PMC LLC, in a letter dated October 16, 2014 relating to the Stock Purchase Agreement by and among GAHI and PMC Capital, LLC and Barbara Desiderio, dated as of August 5, 2014. The demand seeks repayment for expenditures made by GACC prior to the sale and the failure to meet certain minimum requirements in the Stock Purchase Agreement. At this time, the Company is unable to determine the ultimate outcome of the demand or whether it will result in a formal proceeding or action against the Company or any of its officers.


NOTE 9– SUBSEQUENT EVENTS


On April 28, 2016, the Company received a total of $130,000 from various investors for the subscription of investment units at $0.01 per unit. Each unit contains two common shares, one A warrant and one B warrant. The Company issued a total of 13,000,000 common shares, 6,500,000 A warrants and 6,500,000 B warrants to these investors.   Each A warrant is exercisable into one common share of the Company at $0.02per common share with an exercise period of three years.  Each B warrant is exercisable into one common share of the Company at $0.03 per common share with an exercise period of three years.


Subsequent to March 31, 2016, the Company issued 8,084,904 shares of common stock in connection with the conversion of convertible promissory notes payable and accrued interest totaling $13,495.





25



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Forward-looking Statements


Statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operation, as well as in certain other parts of this Annual report on Form 10-K (as well as information included in oral statements or other written statements made or to be made by the Company) that look forward in time, are forward-looking statements made pursuant to the safe harbor provisions of the Private Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, expectations, predictions, and assumptions and other statements that are other than statements of historical facts. Although The Company believes such forward-looking statements are reasonable, it can give no assurance that any forward-looking statements will prove to be correct.  Such forward-looking statements are subject to, and are qualified by, known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by those statements. These risks, uncertainties and other factors include, but are not limited to the Company’s ability to estimate the impact of competition and of industry consolidation and risks, uncertainties and other factors set forth in the Company’s filings with the Securities and Exchange Commission, including without limitation to this Annual Report on Form 10-K.


GAHI undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-K.


Critical Accounting Policies


The Company’s financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are affected by management's applications of accounting policies. Critical accounting policies for the Company include revenue recognition, valuation of convertible promissory notes and related warrants, stock and stock option compensation, estimates, and derivative financial instruments.


The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of GAHI and its wholly-owned and majority owned subsidiaries, GES, GAHI Acquisition Corp., GAIM, and GACOM.  All significant intercompany accounts and transactions have been eliminated in consolidation.  




26



Revenue Recognition


The Company’s revenue recognition policies comply with SEC revenue recognition rules and the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-10-S99. The Company earns revenues through various services it provides to its clients. GES’s income is recognized at the presentation date of the certification of the election results. The payments received in advance are recorded as deferred revenue on the balance sheet. Should an election not proceed, all non-refundable deferred revenue will be recognized as revenue.


Convertible Debt


Convertible debt is accounted for under FASB ASC 470, Debt – Debt with Conversion and Other Options. The Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital.  The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing stock options, except that the contractual life of the warrant is used.  


Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis.  The allocated fair value of the BCF and warrants are recorded as a debt discount and is accreted over the expected term of the convertible debt as interest expense.  


The Company accounts for modifications of its embedded conversion features in accordance with the ASC which requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.




27



Derivative Financial Instruments

 

The Company evaluates its financial instruments 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 in the statements of operations. The Company uses the Black-Scholes-Merton model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.  


Share-Based Compensation


The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company's Statements of Operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance where the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates.


Recent Accounting Pronouncements


Recent accounting pronouncements issued by the FASB and the SEC did not have, are not believed by management to have, a material impact, or are currently evaluating the potential impact of updated authoritative guidance on the Company’s present or future consolidated financial statements.




28



Trends and Uncertainties


The Company currently has minimal revenues and operations and is investigating potential businesses and companies for acquisition to create and/or acquire a sustainable business. Our ability to acquire or create a sustainable business may be adversely affected by our current financial conditions, availability of capital and/ or loans, general economic conditions which can be cyclical in nature along with prolonged recessionary periods, and other economic and political situations.  


The Company has generated recurring losses and cash flow deficits from its operations since inception and has had to continually borrow to continue operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or generate positive cash flows from operations.  As further described in “Liquidity and Capital Resources”, management believes that it will be successful in obtaining additional financing, from which the proceeds will be primarily used to execute its new operating plans. The Company plans to use its available cash and new financing to develop and execute its new business plan and hopefully create and maintain a self-sustaining business.  However, the Company can give no assurances that it will be successful in achieving its plans or if financing will be available or, if available, on terms acceptable to the Company, or at all.  Should the Company not be successful in obtaining the necessary financing to fund its operations, and ultimately achieve adequate profitability and cash flows from operations, the Company would need to curtail certain or all of its operating activities.  


There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations. There are no significant elements of income or loss that do not arise from our continuing operations except for the fair value change on derivative financial instruments and settlement on arbitration.  


The rapid advances in computing and telecommunications technology over the past several decades have brought with them increasingly sophisticated methods of delivering financial services through electronic channels. Along with these advances, though, have come risks regarding the integrity and privacy of data, and these risks apply to financial institutions, probably more than any other industry, falling into the general classification of cybersecurity. While it is not possible for anyone to give an absolute guarantee that data will not be compromised, when applicable, the Company shall utilize third-party service providers to secure the Company’s financial and personal data; the Company believes that third-party service providers provide reasonable assurance that the financial and personal data that they hold are secure.




29



Liquidity and Capital Resources  


As of March 31, 2016, the Company has an accumulated deficit of $17,721,382 and a working capital deficiency of $4,628,036.  Our ability to continue as a going concern depends upon whether we can ultimately attain profitable operations, generate sufficient cash flow to meet our obligations, and obtain additional financing as needed.


For the three months ended March 31, 2016, the Company recorded a net loss of $496,210.  We recorded an amortization of debt discount of $100,255 and debt modification expense of $52,306.  We recorded a financing costs associated with the issuance convertible promissory notes payable of $341,898 and took a charge to earnings of $194,137 for penalty interest on certain convertible promissory notes payable. We recorded a gain for the change in fair value of derivative liability of $170,339.  We had a decrease in prepaid expenses of $20,200, a decrease in accounts payable and accrued expenses of $52,559, and a decrease in deferred revenue of $232,780.  As a result, we had net cash used in operating activities of $137,974 for the three months ended March 31, 2016.


For the three months ended March 31, 2015, the Company recorded a net loss of $1,120,215.  We recorded an amortization of debt discount of $187,062, stock-based compensation expense of $5,273, and a change in fair value of derivative liability of $286,300.  We had a change in prepaid expenses and other current assets of $12,889, a change in deferred revenue of $91,100, and a change in accounts payable and accrued expenses of $248,229.  As a result, we had net cash used in operating activities of $189,362 for the three months ended March 31, 2015.


For the three months ended March 31, 2016, we paid $10,000 as payment for proposed acquisition and paid $698 for the purchase of other assets.  As a result, we had net cash used in investing activities of $10,698 for the period.


For the three months ended March 31, 2015, we received $7,300 from an advance from related parties, resulting in net cash provided by investing activities of $7,300 for the period.


For the three months ended March 31, 2016, we received $167,500 as proceeds from the issuance of convertible promissory notes payable.  We repaid convertible promissory notes of $60,000.  As a result, we had net cash provided by financing activities of $107.500 for the period.


For the three months ended March 31, 2015, we received $32,244 as a result of a bank overdraft and $175,000 as proceeds from promissory notes payable.  As a result, we had net cash provided by financing activities of $207,244 for the period.




30



Management believes that it will be able to continue its operations and further advance its acquisition plans. However, management cannot give assurances that such plans will materialize and be successful in the near term or on terms advantageous to the Company, or at all. Should the Company not be successful in its new business plans or obtain additional financing, the Company would need to curtail certain or all of its operating activities.


The Company’s continuation as a going concern is dependent upon its ability to ultimately attain profitable operations, generate sufficient cash flow to meet its obligations, and obtain additional financing as may be required. Our auditors have included a “going concern” modification in their auditors’ report dated May 6, 2016.  A “going concern” modification may make it more difficult for us to raise funds when needed. The outcome of this uncertainty cannot presently be determined.


The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. There can be no assurance that management will be successful in implementing its business plan or that the successful implementation of such business plan will actually improve our operating results


Results of Operations


Results of Operations for the Three Months Ended March 31, 2016 Compared to the Three Months Ended March 31, 2015


Revenues for the three months ended March 31, 2016 were $666,532 compared to $10,655 for the three months ended March 31, 2015, an increase of $655,877.  The significant increase is due to us growing our election services business.


Salaries and benefits and stock-based compensation totaled $61,730 for the three months ended March 31, 2016 compared to $74,658 for the three months ended March 31, 2015, a decrease of $12,928 due to the reduced number of employees.


Professional fees for the three months ended March 31, 2016 amounted to $124,529 compared to $179,737 for the three months ended March 31, 2015, a decrease of $55,208.  The decrease is due to lower legal fees.




31



For the three months ended March 31, 2016, we had occupancy expenses of $13,389, business development expenses of $110,139, and office and other expenses of $265,569, totaling $389,097. Comparatively, for the three months ended March 31, 2015, we had occupancy expenses of $43,742, business development expenses of $90,856, and office and other expenses of $15,327 totaling $149,925.  Increase in these expenses was $239,172 principally due to the increased expenses from our election services operations.


Total operating expenses for the three months ended March 31, 2016 were $575,356 compared to $404,320 for the three months ended March 31, 2015, an increase of $171,036 principally due to reasons discussed above.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk


Not applicable for smaller reporting companies.


Item 4.  Controls and Procedures


Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of March 31, 2016.  


We do not have proper segregation of duties within our accounting functions, which is a basic internal control.  Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible.  However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals.  Based on this evaluation, our chief executive officer and chief financial officer have concluded such controls and procedures to not be effective as of March 31, 2016 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.




32



Evaluation of Changes in Internal Control over Financial Reporting

Our chief executive officer and chief financial officer have evaluated changes in our internal controls over financial reporting that occurred during the three months ended March 31, 2016.  Based on that evaluation, our chief executive officer and chief financial officer, or those persons performing similar functions, did not identify any changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


Important Considerations

The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time.


Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.




33



PART II - OTHER INFORMATION


Item 1.   Legal Proceedings  


The Company may be involved in legal proceedings in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.


On October 10, 2013, GACOM settled a complaint with the National Futures Association for a fine of $50,000 for certain noncompliance with Commodity Futures Trading Commission regulations.  The fine has not been paid and is included in accounts payable and accrued expenses at March 31, 2016 and December 31, 2015.  


Named directors, officers, employees and/or registered representatives of GACC have been called before FINRA for on-the-record interviews in connection with certain FINRA inquiries. GACC has responded to multiple requests for documents and FINRA has taken on-the-record testimony. On October 27, 2014, FINRA indicated that it might recommend enforcement proceedings against GACC, our chairman John Matthews and Brian Joseph Hagerman, the former president and chief compliance officer of GACC. FINRA’s action is commonly referred to as a “Wells Notice” and is a preliminary determination by FINRA staff to recommend disciplinary action against GACC and these individuals.  FINRA is not proposing disciplinary action against the Company.  The allegations are against GACC and these individuals and assert that there were violations of Sections 17(a)(2) and 5 of the Securities Act of 1933 (“Securities Act”); NASD Rules 3010 and 3040; and FINRA Rules 2010, 5122(b)(2) and 5122(b)(1)(B).  GACC and Messrs. Matthews and Hagerman are responding to this Wells Notice and believe that they have meritorious arguments. On October 30, 2015, John Matthews submitted a Letter of Acceptance, Waiver and Consent (“AWC”) to FINRA for purposes of proposing a settlement.

 

On February 11, 2015, John S. Matthews was advised by the staff of FINRA’s Department of Enforcement (the “Staff”) that they intended to recommend that FINRA commence a disciplinary action against Mr. Matthews, in his former capacity as an executive of GACC for a violation of FINRA Rules 2010 and 8210 by failing to provide information to the Staff in what the Staff considered to be a timely manner. Mr. Matthews provided additional materials to FINRA subsequent to the February 11, 2015 notice and submitted a response to the Staff’s allegations on February 25, 2015, disputing the proposed charges against him. Mr. Matthews has at all times cooperated with the Staff’s inquiries and continues to do so. On October 30, 2015, John Matthews submitted a Letter of Acceptance, Waiver and Consent (“AWC”) to FINRA for purposes of proposing a settlement.




34



On April 10, 2014, the Legal Section of FINRA formally notified GACC that it had made a preliminary determination to recommend that disciplinary action be brought against GACC for (1) failing to buy and sell corporate bonds at prices that were fair; and (2) failing to have in place a supervisory system that was reasonably designed to achieve compliance with applicable securities laws and regulations and FINRA rules.  GACC has responded and intends to contest this matter. On October 30, 2015, John Matthews submitted a Letter of Acceptance, Waiver and Consent (“AWC”) to FINRA for purposes of proposing a settlement.


On December 23, 2014, one of the Company’s prior attorneys commenced an action against GACC, GAHI, and PMC Capital seeking payment of $150,019 in unpaid legal fees. This amount is included in accounts payable. At this time, management is unable to determine what the ultimate outcome of these proceedings will be and whether there will be a material impact on the Company’s operations or the consolidated financial statements.


On July 2, 2014, an action was commenced by a group of individuals against GACC, the Company, and the chief executive officer of the Company, which asserts claims for minimum wage and overtime violations under New York State Labor Law, and seeks damages in an amount to be determined at trial, plus interest, attorneys’ fees and costs. Pursuant to a stipulation, the time for defendants to answer, move or otherwise respond to the Complaint was extended to and including June 1, 2015.


The Company and certain of its officers were named in connection with a demand for repayment of $695,000 by PMC LLC, in a letter dated October 16, 2014 relating to the Stock Purchase Agreement by and among GAHI and PMC Capital, LLC and Barbara Desiderio, dated as of August 5, 2014. The demand seeks repayment for expenditures made by GACC prior to the sale and the failure to meet certain minimum requirements in the Stock Purchase Agreement. At this time, the Company is unable to determine the ultimate outcome of the demand or whether it will result in a formal proceeding or action against the Company or any of its officers.


Item 1A.  Risk Factors

Not applicable for smaller reporting company




35



Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

On February 10, 2016, the Company issued 2,102,564 common shares to Apollo Capital Corp. as an adjustment to a prior conversion that occurred in December 2015.


On February 23, 2016 the Company issued 2,608,758 common shares to Capitoline Ventures II, LLC upon the conversion of $24,560 of convertible debentures.


On March 24, 2016, the Company issued 370,452 common shares to Union Capital upon the conversion of $3,000 of convertible debentures.


The above shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.


Item 3.   Defaults Upon Senior Securities  

The Company is currently in default on $50,000 of convertible promissory notes payable.


Item 4.  Mine Safety Disclosures

Not applicable


Item 5.   Other Information  

None


Item 6.   Exhibits

Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of

  2002

Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of

  2002

101.INS**   XBRL Instance Document

101.SCH**   XBRL Taxonomy Extension Schema Document

101.CAL**   XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**   XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**   XBRL Taxonomy Extension Label Linkbase Document

101.PRE**   XBRL Taxonomy Extension Presentation Linkbase Document


*  Filed herewith

**XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. To be filed by amendment.





36



SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


Dated: August 18, 2016


Global Arena Holding, Inc.



/s/John Matthews

   John Matthews

   Chief Executive Officer

   Chief Financial Officer



37



EX-31 2 globalarena10q1q16ex31.htm EXHIBIT 31 302 Certification

302 CERTIFICATION


I, John Matthews, certify that:


         1. I have reviewed this quarterly report on Form 10-Q of Global Arena Holding, Inc.;


         2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


         3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


         4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


      a.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures, to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;


      b.  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


      c.  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


      d.  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


         5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


         a.  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


         b.  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: August 18, 2016

/s/John Matthews

John Matthews

Chief Executive Officer

Chief Financial Officer






EX-32 3 globalarena10q1q16ex32.htm EXHIBIT 32 906 Certification

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


The undersigned officer of Global Arena Holding, Inc. (the "Company"), hereby certifies, to such officer's knowledge, that the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2016 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/John Matthews

John Matthews

Chief Executive Officer

Chief Financial Officer



August 18, 2016

 




EX-101.INS 4 gahc-20160331.xml XBRL INSTANCE DOCUMENT 7228 48400 0 20200 7228 68600 10500 10500 30000 20000 284270 284270 14265 13567 346263 396937 1141196 1124612 50000 280000 1572396 1270829 230000 230000 154630 387410 1487042 1020408 4635264 4313259 237953 213035 4873217 4526294 0 0 55710 50628 13138718 13045187 -17721382 -17225172 -4526954 -4129357 346263 396937 0.001 0.001 10000000 2000000 0 0 0 0 0.001 0.001 1000000000 100000000 55709983 50628209 55709983 50628209 100255 187062 -170339 386300 341898 0 194137 0 52306 0 20200 12889 -232780 91100 52559 248229 -137974 -189362 -698 0 -10000 0 0 7300 -10698 7300 0 32244 0 175000 167500 0 -60000 0 107500 207244 -41172 25182 48400 54977 7228 80159 0 50 0 0 630675 143827 0 188000 27530 0 10900 0 666532 10655 61730 69385 13389 43742 110139 90856 124529 179737 0 5273 265569 15327 575356 404320 91176 -393665 -757725 -340250 170339 -386300 -587386 -726550 -496210 -1120215 0 0 -496210 -1120215 0 2209 -496210 -1122424 52872664 24136693 -0.01 -0.05 10-Q 2016-03-31 false Global Arena Holding, Inc. 0001138724 gahc --12-31 55709983 1393591 Smaller Reporting Company Yes Yes No 2016 Q1 <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><b>1.&#160; ORGANIZATION </b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><u>Organization and Business</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Global Arena Holding, Inc. (formerly, &#147;Global Arena Holding Subsidiary Corp.&#148;) (&#147;GAHI&#148;), was formed in February 2009, in the state of Delaware.&#160; GAHI and its subsidiaries (the &#147;Company&#148;) was previously a financial services firm and currently is focusing on the following businesses through these subsidiaries:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>On February 25, 2015, Global Election Services, Inc. (&#147;GES&#148;), a wholly owned subsidiary was incorporated in the State of Delaware. GES provides comprehensive technology-enabled election services primarily for organized labor associations.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>On May 20, 2015, the Company incorporated a wholly owned subsidiary in the State of Delaware called &#147;GAHI Acquisition Corp.&#148;&#160; This entity is to be the merger subsidiary for the potential acquisition of Blockchain Technologies Corp.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Global Arena Investment Management LLC (&#147;GAIM&#148;), a wholly owned subsidiary, provided investment advisory services to its clients.&#160; GAIM was formally registered with the SEC as an investment advisor. This subsidiary is currently inactive.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Global Arena Commodities Corporation (&#147;GACOM&#148;), which is 100% owned by GAHI, ceased all operations in 2014 and the Company plans to close GACOM in 2016.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><u>Basis of Presentation </u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>The unaudited condensed consolidated financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission.&#160; The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the financial condition of the Company and its operating results for the respective periods. The condensed consolidated balance sheet at December 31, 2015 has been derived from the Company's audited consolidated financial statements. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company&#146;s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission. The results for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><u>Going Concern</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates the continuation of the Company as a going concern. The Company has generated recurring losses and cash flow deficits from its continuing operations since inception and has had to continually borrow to continue operating. In addition, with the sale of Global Arena Capital Corp. in August 2014, which was the Company&#146;s principal operating business, the Company&#146;s continuing operations are insufficient to support its ongoing activities. In addition, certain of the Company&#146;s debt went into default and required extensions and adjustments to previously issued warrants and conversion prices.&#160; Certain debt continues to be in default as of March 31, 2016. These factors raise substantial doubt about the Company&#146;s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or acquire or develop a business that generates sufficient positive cash flows from operations.&#160; In May, 2015, the Company entered into an agreement and plan of merger with Blockchain Technologies Corporation (&#147;BTC&#148;), which holds provisional patents and intellectual property for creating a new 3D Blockchain technology. In October, 2015, the Company acquired 10% of the outstanding equity in BTC. The management of the Company is also in negotiations with other companies it believes could be beneficial to the Company&#146;s operations. The Company continues to raise funds from the issuance of additional convertible promissory note. Management is hopeful that with its new focus on business acquisitions and their ability to raise additional funds that the Company should be able to continue as a going concern.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><b>2.&#160; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Principles of Consolidation</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of GAHI and its wholly-owned and majority owned subsidiaries, GES, GAHI Acquisition Corp., GAIM, and GACOM.&#160; All significant intercompany accounts and transactions have been eliminated in consolidation.&#160; </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Basic and Diluted Earnings (Loss) Per Share</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Earnings per share is calculated in accordance with the ASC 260-10, Earnings Per Share. Basic earnings-per-share is based upon the weighted average number of common shares outstanding. Diluted earnings-per-share is based on the assumption that all dilutive convertible notes, stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.&#160; The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="332" style='width:249.25pt;border-collapse:collapse'> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="89" valign="bottom" style='width:66.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>March 31, 2016</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>March 31, 2015</p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Options</p> </td> <td width="89" valign="bottom" style='width:66.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>3,000,000 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2,075,000 </p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Warrants</p> </td> <td width="89" valign="bottom" style='width:66.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>65,670,263 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>38,136,449 </p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible notes</p> </td> <td width="89" valign="bottom" style='width:66.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>134,318,946 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>9,585,586 </p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Total</p> </td> <td width="89" valign="bottom" style='width:66.55pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>202,989,209 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>49,797,035 </p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Management Estimates</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.&#160; Significant estimates reflected in the consolidated financial statements include, but are not limited to, share-based compensation, and assumptions used in valuing derivative liabilities. Actual results could differ from those estimates.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Cash and Cash Equivalents</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents.&#160; </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Convertible Debt</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Convertible debt is accounted for under FASB ASC 470, Debt &#150; Debt with Conversion and Other Options. The Company records a beneficial conversion feature (&#147;BCF&#148;) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital.&#160; The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing stock options, except that the contractual life of the warrant is used.&#160; </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis.&#160; The allocated fair value of the BCF and warrants are recorded as a debt discount and is accreted over the expected term of the convertible debt as interest expense.&#160; </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company accounts for modifications of its embedded conversion features in accordance with the ASC which requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Derivative Financial Instruments</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company evaluates its financial instruments 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 in the statements of operations. The Company uses the Black-Scholes-Merton model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.&#160; </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Revenue Recognition</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company&#146;s revenue recognition policies comply with SEC revenue recognition rules and the Financial Accounting Standards Board (&#147;FASB&#148;) Accounting Standards Codification (&#147;ASC&#148;) 605-10-S99. The Company earns revenues through various services it provides to its clients. GES&#146;s income is recognized at the presentation date of the certification of the election results. The payments received in advance are recorded as deferred revenue on the balance sheet. Should an election not proceed, all non-refundable deferred revenue will be recognized as revenue.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Share-Based Compensation</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company's Statements of Operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance where the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates. </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Fair Value of Financial Instruments</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>FASB ASC 820, <i>Fair Value Measurement</i> defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability.&#160; The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Fair Value Measurements</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company applies the provisions of ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='width:100.0%'> <tr align="left"> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp; </p> </td> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td valign="top" style='padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.</p> </td> </tr> </table> </div> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='width:100.0%'> <tr align="left"> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp; </p> </td> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td valign="top" style='padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify'>Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</p> </td> </tr> </table> </div> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='width:100.0%'> <tr align="left"> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp; </p> </td> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td valign="top" style='padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify'>Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.</p> </td> </tr> </table> </div> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><i>Cash, accounts receivable, cash overdraft, accounts payable and accrued expenses and deferred revenue</i> &#150; The carrying amounts reported in the consolidated balance sheets for these items are a reasonable estimate of fair value due to their short term nature.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><i>Promissory notes payable and convertible promissory notes payable</i> &#150; Promissory notes payable and convertible promissory notes payable are recorded at amortized cost.&#160; The carrying amount approximates their fair value.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company uses Level 2 inputs for its valuation methodology for the beneficial conversion feature and warrant derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. The Company&#146;s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The following table presents the Company&#146;s assets and liabilities required to be reflected within the fair value hierarchy as of March 31, 2016 and December 31, 2015.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="639" style='width:479.0pt;border-collapse:collapse'> <tr style='height:15.0pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Fair Value</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="307" colspan="5" valign="bottom" style='width:230.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Fair Value Measurements at</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>As of</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="307" colspan="5" valign="bottom" style='width:230.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>March 31, 2016</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Description</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>March 31, 2016</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="307" colspan="5" valign="bottom" style='width:230.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Using Fair Value Hierarchy</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="top" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="top" style='width:70.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Level 1</font></p> </td> <td width="15" valign="top" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="top" style='width:70.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Level 2</font></p> </td> <td width="12" valign="top" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="top" style='width:70.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Level 3</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Beneficial conversion feature</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,355,942 </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,355,942 </font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Warrant derivative&#160; </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>131,100 </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>131,100 </font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> </tr> <tr style='height:6.75pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Total</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,487,042 </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,487,042 </font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="682" style='width:511.6pt;border-collapse:collapse'> <tr style='height:16.5pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Fair Value</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="306" colspan="5" valign="bottom" style='width:229.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Fair Value Measurements at</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>As of</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="306" colspan="5" valign="bottom" style='width:229.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>December 31, 2015</p> </td> </tr> <tr style='height:15.75pt'> <td width="188" valign="bottom" style='width:141.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Description</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>December 31, 2015</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="306" colspan="5" valign="bottom" style='width:229.25pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Using Fair Value Hierarchy</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="top" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="top" style='width:64.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Level 1</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</p> </td> <td width="90" valign="top" style='width:67.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Level 2</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</p> </td> <td width="86" valign="top" style='width:64.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Level 3</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Beneficial conversion feature</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>611,200 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="90" valign="bottom" style='width:67.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>611,200 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Warrant derivative&#160; </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>409,208 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>409,208 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:6.75pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:15.75pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Total</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="145" valign="bottom" style='width:108.75pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,020,408 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="90" valign="bottom" style='width:67.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,020,408 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Income Taxes </u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Under ASC 740, a tax position is recognized as a benefit only if it is &#147;more likely than not&#148; that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the &#147;more likely than not&#148; test, no tax benefit is recorded. The adoption had no effect on the Company&#146;s consolidated financial statements.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Recently Issued Accounting Pronouncements</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. This pronouncement is effective for annual reporting periods beginning after December 15, 2016, and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company&#146;s consolidated financial statements. Early adoption is permitted.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company&#146;s consolidated financial statements. Early adoption is permitted.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period&#146;s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.&#160; In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company&#146;s consolidated financial statements.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not anticipate the adoption of this ASU will have a significant impact on its consolidated financial position, results of operations, or cash flows.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting, to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of this newly issued guidance to its consolidated financial statements.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><b>NOTE 3 - INVESTMENT</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>On October 20, 2015, the Company paid $125,000 in cash and issued to Nikolaos Spanos, 1,377,398 of its common stock (valued at $68,870) and 1,993,911 warrants to purchase its common shares at the exercise price of $0.10 per common share exercisable for three years (valued at $90,400).&#160; The common shares and warrants are being issued for the purchase of 1,000,000 common shares of Blockchain Technologies Corporation (&#147;BTC&#148;).&#160; Said common shares represent ten percent (10%) of the outstanding equity in BTC.&#160; This investment is accounted for under the cost method.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><b>NOTE 4 - PROMISSORY NOTES PAYABLE</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In March 2014, the Company issued two promissory notes for a total of $230,000. The interest rate is the short-term applicable federal rate as determined by the Internal Revenue Service for the calendar month plus 10%. These two promissory notes were expired on September 14, 2015 and are in default as of March 31, 2016.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><b>NOTE 5 - CONVERTIBLE PROMISSORY NOTES PAYABLE </b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Convertible promissory notes payable at March 31, 2016 and December 31, 2015 consist of the following:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="534" style='width:400.5pt;border-collapse:collapse'> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>March 31, 2016</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>December 31, 2015</p> </td> </tr> <tr style='height:57.75pt'> <td width="306" valign="bottom" style='width:229.45pt;padding:0in 5.4pt 0in 5.4pt;height:57.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes with interest at 12% per annum, convertible into common shares at a fixed price ranging from $0.02 to $0.10 per share. Maturity dates range from April 30, 2016 to November 11, 2018</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,492,500 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,262,500 </p> </td> </tr> <tr style='height:71.25pt'> <td width="306" valign="bottom" style='width:229.45pt;padding:0in 5.4pt 0in 5.4pt;height:71.25pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes with interest at 12% per annum, convertible into common shares at a fixed price ranging from $0.06 to $0.14 per share. These convertible promissory notes are currently in default. (default as of March 31, 2016)</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:71.25pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:71.25pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>50,000 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:71.25pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:71.25pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>280,000 </p> </td> </tr> <tr style='height:79.5pt'> <td width="306" valign="bottom" style='width:229.45pt;padding:0in 5.4pt 0in 5.4pt;height:79.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes with interest at 12% per annum, convertible into common shares at a price ranging from $0.08 to $0.14 or a 50% discount from the lowest trade price in the 20 trading days prior to conversion (as of March 31, 2016 the conversion price would be $0.0081 per share)</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:79.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:79.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>742,625 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:79.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:79.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>335,118 </p> </td> </tr> <tr style='height:57.0pt'> <td width="306" valign="bottom" style='width:229.45pt;padding:0in 5.4pt 0in 5.4pt;height:57.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes with interest at 8% per annum, convertible into common shares at a fixed price of $0.02 per share. The maturity date is April 30, 2016.</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>250,000 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>250,000 </p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Total convertible promissory notes payable</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2,535,125 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2,127,618 </p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Unamortized debt discount</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(552,276)</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(363,754)</p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes payable, net discount</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,982,849 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,763,864 </p> </td> </tr> <tr style='height:39.0pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:39.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Less notes receivable collateralized by convertible promissory notes payable </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:39.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:39.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(122,500)</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:39.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:39.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>- </p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,860,349 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,763,864 </p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Less current portion</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(1,622,396)</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(1,550,829)</p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Long-term portion</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="83" valign="bottom" style='width:62.15pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>237,953 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="90" valign="bottom" style='width:67.3pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>213,035 </p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>During the three months ended March 31, 2016, the Company issued four convertible promissory notes payable totaling $245,000 to one investor for which the Company received $122,500 in cash and notes receivable from the same investor totaling $122,500.&#160; Since the notes receivable were issued to the Company as payment for certain convertible promissory notes payable, the Company has not presented these notes receivable as an asset, but as an offset to the convertible promissory notes payable balance. In addition to the above four convertible promissory notes payable, during the three months ended March 31, 2016, the Company issued two additional convertible promissory notes payable to two other investors for gross proceeds of $45,000.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>A rollfoward of the convertible promissory notes payable from December 31, 2015 to March 31, 2016 is below:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="450" style='width:337.2pt;border-collapse:collapse'> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes payable, December 31, 2015</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,763,864 </p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Issued for cash </p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>167,500 </p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Issued for penalty interest</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>194,137 </p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Issued for capitalized interest</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>10,900 </p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Repayment for cash</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(60,000)</p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Conversion to common stock</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(27,530)</p> </td> </tr> <tr style='height:12.75pt'> <td width="369" colspan="2" valign="bottom" style='width:276.4pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Debt discount related to new convertible promissory notes</p> </td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(288,777)</p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Amortization of debt discounts</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>100,255 </p> </td> </tr> <tr style='height:13.5pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes payable, March 31, 2016</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="81" valign="bottom" style='width:60.8pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,860,349 </p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><b>NOTE 6 - DERIVATIVE FINANCIAL INSTRUMENTS</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>On December 31, 2012, in connection with an extension of the maturity date of certain convertible notes which were due on May 31, 2012, the Company issued the holder a warrant to purchase shares of common stock of the Company not exceeding 9.99% of the issued and outstanding shares and potential issuable shares related to outstanding options, warrants and convertible debt of the Company. The Company determined that the anti-dilution provision feature of the warrants to be an embedded derivative instrument.&#160; This derivative is adjusted to fair value at each balance sheet with the changes in fair value recognized in operations.&#160;&#160; In addition, certain of the Company&#146;s convertible promissory notes payable are convertible into shares of the Company&#146;s common stock at a percentage of the market price on the date of conversion.&#160; The Company has determined that the variable conversion rate is an embedded derivative instrument. The Company uses the Black-Scholes valuation method to value the derivative instruments at inception and on subsequent valuation dates. Weighted average assumptions used to estimate fair values are as follows:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="529" style='width:396.4pt;border-collapse:collapse'> <tr style='height:12.75pt'> <td width="345" valign="bottom" style='width:258.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="92" valign="bottom" style='width:68.8pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>March 31, 2016</p> </td> <td width="92" valign="bottom" style='width:68.8pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>December 31, 2015</p> </td> </tr> <tr style='height:12.75pt'> <td width="345" valign="bottom" style='width:258.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Risk-free interest rate</p> </td> <td width="92" valign="bottom" style='width:68.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.59%</p> </td> <td width="92" valign="bottom" style='width:68.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.16%</p> </td> </tr> <tr style='height:12.75pt'> <td width="345" valign="bottom" style='width:258.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Expected life of the options (Years)</p> </td> <td width="92" valign="bottom" style='width:68.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.55 </p> </td> <td width="92" valign="bottom" style='width:68.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.25 </p> </td> </tr> <tr style='height:12.75pt'> <td width="345" valign="bottom" style='width:258.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Expected volatility</p> </td> <td width="92" valign="bottom" style='width:68.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>411%</p> </td> <td width="92" valign="bottom" style='width:68.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>211%</p> </td> </tr> <tr style='height:12.75pt'> <td width="345" valign="bottom" style='width:258.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Expected dividend yield</p> </td> <td width="92" valign="bottom" style='width:68.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0%</p> </td> <td width="92" valign="bottom" style='width:68.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0%</p> </td> </tr> <tr style='height:8.25pt'> <td width="345" valign="bottom" style='width:258.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:8.25pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="92" valign="bottom" style='width:68.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:8.25pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="92" valign="bottom" style='width:68.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:8.25pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:13.5pt'> <td width="345" valign="bottom" style='width:258.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Fair Value</p> </td> <td width="92" valign="bottom" style='width:68.8pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,487,042 </p> </td> <td width="92" valign="bottom" style='width:68.8pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,020,408 </p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>For the three months ended March 31, 2016 and 2015, the Company recognized a change in this derivative liability of $170,339 and $(386,300), respectively, in other income (expense).</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><b>NOTE 7- STOCKHOLDERS&#146; DEFICIT</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Common Stock</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>On April 28, 2016 the stockholders approved an amendment to the Company&#146;s articles of incorporation to increase the number of authorized common shares from 100,000,000 to 1,000,000,000. In addition, the stockholders also approved an amendment to the Company&#146;s Stock Awards Plan, originally filed June 27, 2011, which will increase the number of shares authorized to be issued under the Plan from 3,000,000 shares to 7,460 ,000 shares.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>During the three months ended March 31, 2016, the Company issued 5,081,774 shares of common stock for convertible promissory notes payable of $27,530.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>During the three months ended March 31, 2016, the Company extended the due date of certain convertible promissory notes payable.&#160; In consideration of extending the due dates, the Company lowered the conversion price for certain convertible promissory notes payable and lowered the exercise price of certain warrants.&#160; The Company took a charge to earnings of $52,306 which represents the change in fair value of the conversion features and warrants between the old terms and the new terms.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Option Activity</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>A summary of the option activity is presented below:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="560" style='width:419.7pt;border-collapse:collapse'> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Weighted</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Weighted</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Average</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Average</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Remaining</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Aggregate</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Number of</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Exercise</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Contractual</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Intrinsic</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="91" valign="bottom" style='width:68.35pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Options</p> </td> <td width="75" valign="bottom" style='width:56.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Price ($)</p> </td> <td width="111" valign="bottom" style='width:83.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Life (in years)</p> </td> <td width="78" valign="bottom" style='width:58.8pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Value ($)</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Outstanding, December 31, 2015</p> </td> <td width="91" valign="bottom" style='width:68.35pt;border:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>3,000,000 </p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.07 </p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>4.63 </p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>- </p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Granted</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Exercised</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Forfeited/Canceled</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Outstanding, March 31, 2016</p> </td> <td width="91" valign="bottom" style='width:68.35pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>3,000,000 </p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.07 </p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>4.38 </p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>- </p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Exercisable, March 31, 2016</p> </td> <td width="91" valign="bottom" style='width:68.35pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>3,000,000 </p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.07 </p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>4.38 </p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>- </p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Warrant Activity</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>A summary of warrant activity is presented below:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="554" style='width:415.65pt;border-collapse:collapse'> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Weighted</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Weighted</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Average</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Average</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Remaining</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Aggregate</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Number of</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Exercise</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Contractual</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Intrinsic</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Warrants</p> </td> <td width="79" valign="bottom" style='width:59.25pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Price ($)</p> </td> <td width="114" valign="bottom" style='width:85.35pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Life (in years)</p> </td> <td width="79" valign="bottom" style='width:59.25pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Value ($)</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Outstanding, December 31, 2015</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>64,586,931 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.15 </p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2.33 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>666,279 </p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Granted</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,083,332 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Exercised</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Forfeited/Canceled</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Outstanding, March 31, 2016</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>65,670,263 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.14 </p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2.09 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>146,609 </p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Exercisable, March 31, 2016</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>65,670,263 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.14 </p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2.09 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>146,609 </p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>During the three months ended March 31, 2016, the Company issued a total of 1,083,332 warrants in connection with a new convertible note and an extension to an existing convertible note. The fair values of the warrants were determined using the Black-Scholes option pricing model with the following assumptions:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#149;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Expected life of 3.0 years</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#149;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Volatility of 439%;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#149;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Dividend yield of 0%;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#149;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Risk free interest rate of 1.05%</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><b>NOTE 8 - COMMITMENTS AND CONTINGENCIES</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company may be involved in legal proceedings in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>On October 10, 2013, GACOM settled a complaint with the National Futures Association for a fine of $50,000 for certain noncompliance with Commodity Futures Trading Commission regulations.&#160; The fine has not been paid and is included in accounts payable and accrued expenses at March 31, 2106 and December 31, 2015.&#160; </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Named directors, officers, employees and/or registered representatives of GACC have been called before FINRA for on-the-record interviews in connection with certain FINRA inquiries. GACC has responded to multiple requests for documents and FINRA has taken on-the-record testimony. On October 27, 2014, FINRA indicated that it might recommend enforcement proceedings against GACC, our chairman John Matthews and Brian Joseph Hagerman, the former president and chief compliance officer of GACC. FINRA&#146;s action is commonly referred to as a &#147;Wells Notice&#148; and is a preliminary determination by FINRA staff to recommend disciplinary action against GACC and these individuals.&#160; FINRA is not proposing disciplinary action against the Company.&#160; The allegations are against GACC and these individuals and assert that there were violations of Sections 17(a)(2) and 5 of the Securities Act of 1933 (&#147;Securities Act&#148;); NASD Rules 3010 and 3040; and FINRA Rules 2010, 5122(b)(2) and 5122(b)(1)(B).&#160; GACC and Messrs. Matthews and Hagerman are responding to this Wells Notice and believe that they have meritorious arguments.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>On April 10, 2014, the Legal Section of FINRA formally notified GACC that it had made a preliminary determination to recommend that disciplinary action be brought against GACC for (1) failing to buy and sell corporate bonds at prices that were fair; and (2) failing to have in place a supervisory system that was reasonably designed to achieve compliance with applicable securities laws and regulations and FINRA rules.&#160; GACC has responded and intends to contest this matter.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>On February 11, 2015, John S. Matthews was advised by the staff of FINRA&#146;s Department of Enforcement (the &#147;Staff&#148;) that they intended to recommend that FINRA commence a disciplinary action against Mr. Matthews, in his former capacity as an executive of GACC for a violation of FINRA Rules 2010 and 8210 by failing to provide information to the Staff in what the Staff considered to be a timely manner. Mr. Matthews provided additional materials to FINRA subsequent to the February 11, 2015 notice and submitted a response to the Staff&#146;s allegations on February 25, 2015, disputing the proposed charges against him. Mr. Matthews has at all times cooperated with the Staff&#146;s inquiries and continues to do so.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>On December 1, 2015, John S. Matthews, the chief executive officer and director, signed a &quot;Letter of Acceptance, Waiver and Consent (&quot;AWC&quot;) with FINRA consenting to the entry of findings by FINRA, without admitting or denying any wrongdoing, that he did not provide any written disclosures to, or receive any written approval from, his member firm prior to selling promissory notes issued by the Company, some of the investors were not qualified purchasers as defined in Section 2(a)(51)(A) of the Investment Company Act, and the sales were not exempt from the requirements of FINRA Rule 5122, and he willfully failed to disclose an unsatisfied $25,590 federal tax lien within 30 days.&#160;&#160; The AWC was accepted by FINRA on December 2, 2015.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>As a result of the AWC, Mr. Matthews is subject to a six-month suspension from association with any FINRA member, and a fine of $25,000.&#160; As such, Mr. Matthews is statutorily disqualified with respect to association with a FINRA member.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>As a result of the AWC, the registrant is statutorily disqualified from relying in the future on certain exemptions from registration of its securities promulgated under Rule 506 of the Securities Act of 1933 (the &quot;Act&quot;) for the length of the suspension as long as Mr. Matthews remains an officer and/or director and/or holder of 10% or more of the voting securities of the registrant.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>On November 5, 2015, one of the Company&#146;s prior attorneys commenced an action against GAHI, seeking payment of $27,518 in unpaid legal fees. This amount is included in accounts payable. At this time, management is unable to determine what the ultimate outcome of these proceedings will be and whether there will be a material impact on the Company&#146;s operations or the consolidated financial statements.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>On December 23, 2014, one of the Company&#146;s prior attorneys commenced an action against GACC, GAHI, and PMC Capital seeking payment of $150,019 in unpaid legal fees. This amount is included in accounts payable. At this time, management is unable to determine what the ultimate outcome of these proceedings will be and whether there will be a material impact on the Company&#146;s operations or the consolidated financial statements.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>On July 2, 2014, an action was commenced by a group of individuals against GACC, the Company, and the chief executive officer of the Company, which asserts claims for minimum wage and overtime violations under New York State Labor Law, and seeks damages in an amount to be determined at trial, plus interest, attorneys&#146; fees and costs. At this time, the Company is unable to determine the ultimate outcome of the demand or whether it will result in a formal proceeding or action against the Company or any of its officers.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company and certain of its officers were named in connection with a demand for repayment of $695,000 by PMC LLC, in a letter dated October 16, 2014 relating to the Stock Purchase Agreement by and among GAHI and PMC Capital, LLC and Barbara Desiderio, dated as of August 5, 2014. The demand seeks repayment for expenditures made by GACC prior to the sale and the failure to meet certain minimum requirements in the Stock Purchase Agreement. At this time, the Company is unable to determine the ultimate outcome of the demand or whether it will result in a formal proceeding or action against the Company or any of its officers.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><b>NOTE 9&#150; SUBSEQUENT EVENTS</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>On April 28, 2016, the Company received a total of $130,000 from various investors for the subscription of investment units at $0.01 per unit. Each unit contains two common shares, one A warrant and one B warrant. The Company issued a total of 13,000,000 common shares, 6,500,000 A warrants and 6,500,000 B warrants to these investors.&#160;&#160; Each A warrant is exercisable into one common share of the Company at $0.02 per common share with an exercise period of three years.&#160; Each B warrant is exercisable into one common share of the Company at $0.03 per common share with an exercise period of three years.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Subsequent to March 31, 2016, the Company issued 8,084,904 shares of common stock in connection with the conversion of convertible promissory notes payable and accrued interest totaling $13,495.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><u>Going Concern</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates the continuation of the Company as a going concern. The Company has generated recurring losses and cash flow deficits from its continuing operations since inception and has had to continually borrow to continue operating. In addition, with the sale of Global Arena Capital Corp. in August 2014, which was the Company&#146;s principal operating business, the Company&#146;s continuing operations are insufficient to support its ongoing activities. In addition, certain of the Company&#146;s debt went into default and required extensions and adjustments to previously issued warrants and conversion prices.&#160; Certain debt continues to be in default as of March 31, 2016. These factors raise substantial doubt about the Company&#146;s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or acquire or develop a business that generates sufficient positive cash flows from operations.&#160; In May, 2015, the Company entered into an agreement and plan of merger with Blockchain Technologies Corporation (&#147;BTC&#148;), which holds provisional patents and intellectual property for creating a new 3D Blockchain technology. In October, 2015, the Company acquired 10% of the outstanding equity in BTC. The management of the Company is also in negotiations with other companies it believes could be beneficial to the Company&#146;s operations. The Company continues to raise funds from the issuance of additional convertible promissory note. Management is hopeful that with its new focus on business acquisitions and their ability to raise additional funds that the Company should be able to continue as a going concern.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Principles of Consolidation</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of GAHI and its wholly-owned and majority owned subsidiaries, GES, GAHI Acquisition Corp., GAIM, and GACOM.&#160; All significant intercompany accounts and transactions have been eliminated in consolidation.&#160; </p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Basic and Diluted Earnings (Loss) Per Share</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Earnings per share is calculated in accordance with the ASC 260-10, Earnings Per Share. Basic earnings-per-share is based upon the weighted average number of common shares outstanding. Diluted earnings-per-share is based on the assumption that all dilutive convertible notes, stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.&#160; The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="332" style='width:249.25pt;border-collapse:collapse'> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="89" valign="bottom" style='width:66.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>March 31, 2016</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>March 31, 2015</p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Options</p> </td> <td width="89" valign="bottom" style='width:66.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>3,000,000 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2,075,000 </p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Warrants</p> </td> <td width="89" valign="bottom" style='width:66.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>65,670,263 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>38,136,449 </p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible notes</p> </td> <td width="89" valign="bottom" style='width:66.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>134,318,946 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>9,585,586 </p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Total</p> </td> <td width="89" valign="bottom" style='width:66.55pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>202,989,209 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>49,797,035 </p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Management Estimates</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.&#160; Significant estimates reflected in the consolidated financial statements include, but are not limited to, share-based compensation, and assumptions used in valuing derivative liabilities. Actual results could differ from those estimates.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Cash and Cash Equivalents</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents.&#160; </p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Convertible Debt</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Convertible debt is accounted for under FASB ASC 470, Debt &#150; Debt with Conversion and Other Options. The Company records a beneficial conversion feature (&#147;BCF&#148;) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital.&#160; The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing stock options, except that the contractual life of the warrant is used.&#160; </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis.&#160; The allocated fair value of the BCF and warrants are recorded as a debt discount and is accreted over the expected term of the convertible debt as interest expense.&#160; </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company accounts for modifications of its embedded conversion features in accordance with the ASC which requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Derivative Financial Instruments</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company evaluates its financial instruments 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 in the statements of operations. The Company uses the Black-Scholes-Merton model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.&#160; </p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Revenue Recognition</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company&#146;s revenue recognition policies comply with SEC revenue recognition rules and the Financial Accounting Standards Board (&#147;FASB&#148;) Accounting Standards Codification (&#147;ASC&#148;) 605-10-S99. The Company earns revenues through various services it provides to its clients. GES&#146;s income is recognized at the presentation date of the certification of the election results. The payments received in advance are recorded as deferred revenue on the balance sheet. Should an election not proceed, all non-refundable deferred revenue will be recognized as revenue.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Share-Based Compensation</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company's Statements of Operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance where the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates. </p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Fair Value of Financial Instruments</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>FASB ASC 820, <i>Fair Value Measurement</i> defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability.&#160; The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Fair Value Measurements</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company applies the provisions of ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='width:100.0%'> <tr align="left"> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp; </p> </td> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td valign="top" style='padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.</p> </td> </tr> </table> </div> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='width:100.0%'> <tr align="left"> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp; </p> </td> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td valign="top" style='padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify'>Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</p> </td> </tr> </table> </div> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='width:100.0%'> <tr align="left"> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp; </p> </td> <td width="24" valign="top" style='width:.25in;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td valign="top" style='padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify'>Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.</p> </td> </tr> </table> </div> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><i>Cash, accounts receivable, cash overdraft, accounts payable and accrued expenses and deferred revenue</i> &#150; The carrying amounts reported in the consolidated balance sheets for these items are a reasonable estimate of fair value due to their short term nature.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><i>Promissory notes payable and convertible promissory notes payable</i> &#150; Promissory notes payable and convertible promissory notes payable are recorded at amortized cost.&#160; The carrying amount approximates their fair value.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company uses Level 2 inputs for its valuation methodology for the beneficial conversion feature and warrant derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. The Company&#146;s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The following table presents the Company&#146;s assets and liabilities required to be reflected within the fair value hierarchy as of March 31, 2016 and December 31, 2015.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="639" style='width:479.0pt;border-collapse:collapse'> <tr style='height:15.0pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Fair Value</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="307" colspan="5" valign="bottom" style='width:230.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Fair Value Measurements at</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>As of</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="307" colspan="5" valign="bottom" style='width:230.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>March 31, 2016</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Description</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>March 31, 2016</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="307" colspan="5" valign="bottom" style='width:230.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Using Fair Value Hierarchy</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="top" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="top" style='width:70.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Level 1</font></p> </td> <td width="15" valign="top" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="top" style='width:70.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Level 2</font></p> </td> <td width="12" valign="top" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="top" style='width:70.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Level 3</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Beneficial conversion feature</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,355,942 </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,355,942 </font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Warrant derivative&#160; </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>131,100 </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>131,100 </font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> </tr> <tr style='height:6.75pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Total</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,487,042 </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,487,042 </font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="682" style='width:511.6pt;border-collapse:collapse'> <tr style='height:16.5pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Fair Value</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="306" colspan="5" valign="bottom" style='width:229.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Fair Value Measurements at</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>As of</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="306" colspan="5" valign="bottom" style='width:229.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>December 31, 2015</p> </td> </tr> <tr style='height:15.75pt'> <td width="188" valign="bottom" style='width:141.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Description</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>December 31, 2015</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="306" colspan="5" valign="bottom" style='width:229.25pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Using Fair Value Hierarchy</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="top" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="top" style='width:64.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Level 1</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</p> </td> <td width="90" valign="top" style='width:67.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Level 2</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</p> </td> <td width="86" valign="top" style='width:64.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Level 3</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Beneficial conversion feature</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>611,200 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="90" valign="bottom" style='width:67.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>611,200 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Warrant derivative&#160; </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>409,208 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>409,208 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:6.75pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:15.75pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Total</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="145" valign="bottom" style='width:108.75pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,020,408 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="90" valign="bottom" style='width:67.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,020,408 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Income Taxes </u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Under ASC 740, a tax position is recognized as a benefit only if it is &#147;more likely than not&#148; that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the &#147;more likely than not&#148; test, no tax benefit is recorded. The adoption had no effect on the Company&#146;s consolidated financial statements.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'><u>Recently Issued Accounting Pronouncements</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. This pronouncement is effective for annual reporting periods beginning after December 15, 2016, and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company&#146;s consolidated financial statements. Early adoption is permitted.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company&#146;s consolidated financial statements. Early adoption is permitted.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period&#146;s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.&#160; In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company&#146;s consolidated financial statements.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not anticipate the adoption of this ASU will have a significant impact on its consolidated financial position, results of operations, or cash flows.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&#160;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting, to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of this newly issued guidance to its consolidated financial statements.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="332" style='width:249.25pt;border-collapse:collapse'> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="89" valign="bottom" style='width:66.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>March 31, 2016</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>March 31, 2015</p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Options</p> </td> <td width="89" valign="bottom" style='width:66.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>3,000,000 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2,075,000 </p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Warrants</p> </td> <td width="89" valign="bottom" style='width:66.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>65,670,263 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>38,136,449 </p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible notes</p> </td> <td width="89" valign="bottom" style='width:66.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>134,318,946 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>9,585,586 </p> </td> </tr> <tr style='height:1.0pt'> <td width="163" valign="bottom" style='width:1.7in;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Total</p> </td> <td width="89" valign="bottom" style='width:66.55pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>202,989,209 </p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>49,797,035 </p> </td> </tr> </table> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="639" style='width:479.0pt;border-collapse:collapse'> <tr style='height:15.0pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Fair Value</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="307" colspan="5" valign="bottom" style='width:230.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Fair Value Measurements at</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>As of</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="307" colspan="5" valign="bottom" style='width:230.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>March 31, 2016</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Description</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>March 31, 2016</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="307" colspan="5" valign="bottom" style='width:230.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Using Fair Value Hierarchy</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="top" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="top" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="top" style='width:70.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Level 1</font></p> </td> <td width="15" valign="top" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="top" style='width:70.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Level 2</font></p> </td> <td width="12" valign="top" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="top" style='width:70.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Level 3</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Beneficial conversion feature</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,355,942 </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,355,942 </font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Warrant derivative&#160; </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>131,100 </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>131,100 </font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> </tr> <tr style='height:6.75pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>&nbsp;</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>&nbsp;</font></p> </td> </tr> <tr style='height:16.5pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Total</font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="107" valign="bottom" style='width:80.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,487,042 </font></p> </td> <td width="19" valign="bottom" style='width:14.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> <td width="15" valign="bottom" style='width:11.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>1,487,042 </font></p> </td> <td width="12" valign="bottom" style='width:9.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>$</font></p> </td> <td width="93" valign="bottom" style='width:70.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>-</font></p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="682" style='width:511.6pt;border-collapse:collapse'> <tr style='height:16.5pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Fair Value</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="306" colspan="5" valign="bottom" style='width:229.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:16.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Fair Value Measurements at</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="top" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>As of</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="306" colspan="5" valign="bottom" style='width:229.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>December 31, 2015</p> </td> </tr> <tr style='height:15.75pt'> <td width="188" valign="bottom" style='width:141.0pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Description</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>December 31, 2015</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="306" colspan="5" valign="bottom" style='width:229.25pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Using Fair Value Hierarchy</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="top" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="top" style='width:64.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Level 1</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</p> </td> <td width="90" valign="top" style='width:67.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Level 2</p> </td> <td width="22" valign="top" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</p> </td> <td width="86" valign="top" style='width:64.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Level 3</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Beneficial conversion feature</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>611,200 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="90" valign="bottom" style='width:67.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>611,200 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> </tr> <tr style='height:15.0pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Warrant derivative&#160; </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>409,208 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>409,208 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:6.75pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="145" valign="bottom" style='width:108.75pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="86" valign="bottom" style='width:64.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:6.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:15.75pt'> <td width="188" valign="bottom" style='width:141.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Total</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="145" valign="bottom" style='width:108.75pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,020,408 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="90" valign="bottom" style='width:67.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,020,408 </p> </td> <td width="22" valign="bottom" style='width:16.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="86" valign="bottom" style='width:64.55pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> </tr> </table> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="534" style='width:400.5pt;border-collapse:collapse'> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>March 31, 2016</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>December 31, 2015</p> </td> </tr> <tr style='height:57.75pt'> <td width="306" valign="bottom" style='width:229.45pt;padding:0in 5.4pt 0in 5.4pt;height:57.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes with interest at 12% per annum, convertible into common shares at a fixed price ranging from $0.02 to $0.10 per share. Maturity dates range from April 30, 2016 to November 11, 2018</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,492,500 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,262,500 </p> </td> </tr> <tr style='height:71.25pt'> <td width="306" valign="bottom" style='width:229.45pt;padding:0in 5.4pt 0in 5.4pt;height:71.25pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes with interest at 12% per annum, convertible into common shares at a fixed price ranging from $0.06 to $0.14 per share. These convertible promissory notes are currently in default. (default as of March 31, 2016)</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:71.25pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:71.25pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>50,000 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:71.25pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:71.25pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>280,000 </p> </td> </tr> <tr style='height:79.5pt'> <td width="306" valign="bottom" style='width:229.45pt;padding:0in 5.4pt 0in 5.4pt;height:79.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes with interest at 12% per annum, convertible into common shares at a price ranging from $0.08 to $0.14 or a 50% discount from the lowest trade price in the 20 trading days prior to conversion (as of March 31, 2016 the conversion price would be $0.0081 per share)</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:79.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:79.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>742,625 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:79.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:79.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>335,118 </p> </td> </tr> <tr style='height:57.0pt'> <td width="306" valign="bottom" style='width:229.45pt;padding:0in 5.4pt 0in 5.4pt;height:57.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes with interest at 8% per annum, convertible into common shares at a fixed price of $0.02 per share. The maturity date is April 30, 2016.</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>250,000 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:57.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>250,000 </p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Total convertible promissory notes payable</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2,535,125 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2,127,618 </p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Unamortized debt discount</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(552,276)</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(363,754)</p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes payable, net discount</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,982,849 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,763,864 </p> </td> </tr> <tr style='height:39.0pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:39.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Less notes receivable collateralized by convertible promissory notes payable </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:39.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:39.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(122,500)</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:39.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:39.0pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>- </p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,860,349 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;border:none;border-top:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,763,864 </p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Less current portion</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="83" valign="bottom" style='width:62.15pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(1,622,396)</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="90" valign="bottom" style='width:67.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(1,550,829)</p> </td> </tr> <tr style='height:15.75pt'> <td width="306" valign="bottom" style='width:229.45pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Long-term portion</p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="83" valign="bottom" style='width:62.15pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>237,953 </p> </td> <td width="28" valign="bottom" style='width:20.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>$</p> </td> <td width="90" valign="bottom" style='width:67.3pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>213,035 </p> </td> </tr> </table> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="450" style='width:337.2pt;border-collapse:collapse'> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes payable, December 31, 2015</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,763,864 </p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Issued for cash </p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>167,500 </p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Issued for penalty interest</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>194,137 </p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Issued for capitalized interest</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>10,900 </p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Repayment for cash</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(60,000)</p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Conversion to common stock</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(27,530)</p> </td> </tr> <tr style='height:12.75pt'> <td width="369" colspan="2" valign="bottom" style='width:276.4pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Debt discount related to new convertible promissory notes</p> </td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>(288,777)</p> </td> </tr> <tr style='height:12.75pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Amortization of debt discounts</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'></td> <td width="81" valign="bottom" style='width:60.8pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>100,255 </p> </td> </tr> <tr style='height:13.5pt'> <td width="341" valign="bottom" style='width:3.55in;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Convertible promissory notes payable, March 31, 2016</p> </td> <td width="28" valign="bottom" style='width:20.8pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>$</p> </td> <td width="81" valign="bottom" style='width:60.8pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,860,349 </p> </td> </tr> </table> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="560" style='width:419.7pt;border-collapse:collapse'> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Weighted</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Weighted</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Average</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Average</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Remaining</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Aggregate</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Number of</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Exercise</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Contractual</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Intrinsic</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="91" valign="bottom" style='width:68.35pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Options</p> </td> <td width="75" valign="bottom" style='width:56.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Price ($)</p> </td> <td width="111" valign="bottom" style='width:83.55pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Life (in years)</p> </td> <td width="78" valign="bottom" style='width:58.8pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Value ($)</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Outstanding, December 31, 2015</p> </td> <td width="91" valign="bottom" style='width:68.35pt;border:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>3,000,000 </p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.07 </p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>4.63 </p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>- </p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Granted</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Exercised</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Forfeited/Canceled</p> </td> <td width="91" valign="bottom" style='width:68.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Outstanding, March 31, 2016</p> </td> <td width="91" valign="bottom" style='width:68.35pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>3,000,000 </p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.07 </p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>4.38 </p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>- </p> </td> </tr> <tr style='height:12.75pt'> <td width="204" valign="bottom" style='width:153.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Exercisable, March 31, 2016</p> </td> <td width="91" valign="bottom" style='width:68.35pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>3,000,000 </p> </td> <td width="75" valign="bottom" style='width:56.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.07 </p> </td> <td width="111" valign="bottom" style='width:83.55pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>4.38 </p> </td> <td width="78" valign="bottom" style='width:58.8pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>- </p> </td> </tr> </table> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="554" style='width:415.65pt;border-collapse:collapse'> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Weighted</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Weighted</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Average</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Average</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Remaining</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Aggregate</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Number of</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Exercise</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Contractual</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Intrinsic</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Warrants</p> </td> <td width="79" valign="bottom" style='width:59.25pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Price ($)</p> </td> <td width="114" valign="bottom" style='width:85.35pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Life (in years)</p> </td> <td width="79" valign="bottom" style='width:59.25pt;border:none;border-bottom:solid windowtext 1.0pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'>Value ($)</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Outstanding, December 31, 2015</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>64,586,931 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.15 </p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2.33 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>666,279 </p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Granted</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>1,083,332 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Exercised</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Forfeited/Canceled</p> </td> <td width="80" valign="bottom" style='width:60.3pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>-</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>&nbsp;</p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Outstanding, March 31, 2016</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>65,670,263 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.14 </p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2.09 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>146,609 </p> </td> </tr> <tr style='height:12.75pt'> <td width="202" valign="bottom" style='width:151.5pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'>Exercisable, March 31, 2016</p> </td> <td width="80" valign="bottom" style='width:60.3pt;border:none;border-bottom:double windowtext 2.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>65,670,263 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>0.14 </p> </td> <td width="114" valign="bottom" style='width:85.35pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>2.09 </p> </td> <td width="79" valign="bottom" style='width:59.25pt;background:white;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right'>146,609 </p> </td> </tr> </table> 3000000 2075000 65670263 38136449 134318946 9585586 202989209 49797035 125000 1377398 1993911 0.10 1492500 1262500 50000 280000 742625 335118 250000 250000 2535125 2127618 -552276 -363754 1982849 1763864 -122500 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Summary of Significant Accounting Policies Advances from related parties Advances from related parties (Loss) from operations (Loss) from operations Services Total Stockholders' Deficit Current Fiscal Year End Date Series A warrants issued Series A warrants issued Change in fair value of the conversion features and warrants value of common stock issued for convertible notes payable Total anti-dilutive securities Total anti-dilutive securities Revenue Recognition Net cash (used in) provided by investing activities Net cash (used in) provided by investing activities Statements of Cash Flows Interest expense and financing costs Preferred stock, shares authorized Preferred stock, par value (in dollars per share) Additional paid-in capital Promissory notes payable, in default Promissory notes payable, in default Accounts payable and accrued expenses Current Liabilities Entity Current Reporting Status Expected dividend yield Expected dividend yield Cash Paid to Nikolaos Spanos Represents the monetary amount of Cash Paid to Nikolaos Spanos, as of the indicated date. Assets and liabilities required to be reflected within the fair value hierarchy Assets and liabilities required to be reflected within the fair value hierarchy Schedule of shares excluded as being anti-dilutive Schedule of shares excluded as being anti-dilutive Policies Note 5. Convertible Promissory Notes Purchase of other assets Purchase of other assets CASH FLOWS FROM INVESTING ACTIVITIES: Debt modification expense Debt modification expense Other income (expense) Statement of Financial Position LIABILITIES AND STOCKHOLDERS' DEFICIT Other assets {1} Other assets Warrants issued in connection to convertible notes Warrants issued in connection to convertible notes Expected life of the options (Years) Expected life of the options (Years) Common Stock Issued to Nikolaos Spanos Represents the Common Stock Issued to Nikolaos Spanos (number of shares), as of the indicated date. Cash and Cash Equivalents Note 4 - Promissory Notes Payable PROMISSORY NOTES PAYABLE Interest Convertible promissory notes payable, in default Convertible promissory notes with interest at 12% per annum in default Convertible promissory notes with interest at 12% per annum in default Principles of Consolidation Debt converted to common stock Debt converted to common stock Payment of deposit for acquisition Net loss attributed to common stockholders Net loss attributed to common stockholders Office and other Business development TOTAL ASSETS TOTAL ASSETS Total Current Assets Total Current Assets Entity Central Index Key Document Period End Date Document Type Long term portion of promissory notes amounts due Long term portion of promissory notes amounts due Total convertible promissory notes payable Total convertible promissory notes payable Convertible promissory notes with interest at 12% per annum Convertible promissory notes with interest at 12% per annum Details Net change in cash Net change in cash Proceeds from promissory notes payable Proceeds from promissory notes payable Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities: CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) Cash Amendment Flag Anti-dilutive convertible notes Anti-dilutive convertible notes Schedule of rollfoward of the convertible promissory notes payable Schedule of rollfoward of the convertible promissory notes payable Note 7- Stockholders' Deficit Non-cash investing and financing activities Cash paid for: Repayment of convertible promissory notes payable Change in fair value of derivative liability {1} Change in fair value of derivative liability Net (loss) per share Occupancy TOTAL LIABILITIES TOTAL LIABILITIES Convertible promissory notes payable, net of debt discount of $287,047 and $286,965 Long-term convertible promissory notes payable ASSETS Entity Filer Category Value of promissory notes converted into common shares Value of promissory notes converted into common shares Common shares issued upon conversion of convertible promissory notes payable Common shares issued upon conversion of convertible promissory notes payable Common stock issued for convertible notes payable Common stock issued for convertible notes payable Unamortized debt discount Unamortized debt discount Note 3 - Investment Deferred revenue {1} Deferred revenue Change in current assets and liabilities: Debt modification expense Total other income (expense) Total other income (expense) Stock-based compensation Common stock, par value (in dollars per share) Document Fiscal Year Focus Entity Common Stock, Shares Outstanding Anti-dilutive options Anti-dilutive options Schedule of warrant activity Schedule of warrant activity Income Taxes Fair Value Measurement, Policy Repayment of convertible promissory notes payable Repayment of convertible promissory notes payable Income attributable to noncontrolling interests Total Operating Expenses Preferred stock, shares outstanding Derivative liability Entity Well-known Seasoned Issuer Fair Value Fair Value Convertible promissory notes with interest at 8% per annum Convertible promissory notes with interest at 8% per annum Anti-dilutive warrants Anti-dilutive warrants Accrued interest added to debt Accrued interest added to debt Non-cash financing costs Non-cash financing costs Weighted average number of shares outstanding: basic and diluted TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT Security deposits Balance Sheets Note 8 - Commitments and Contingencies Net cash provided by financing activities Net cash provided by financing activities Proceeds from convertible promissory notes payable Proceeds from convertible promissory notes payable Bank overdraft Salaries and benefits REVENUE Deposit for proposed acquisition Deposit for proposed acquisition Trading Symbol EX-101.PRE 9 gahc-20160331_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT XML 10 R1.htm IDEA: XBRL DOCUMENT v3.5.0.2
Document and Entity Information - USD ($)
3 Months Ended
Mar. 31, 2016
Jun. 30, 2015
Document and Entity Information:    
Entity Registrant Name Global Arena Holding, Inc.  
Document Type 10-Q  
Document Period End Date Mar. 31, 2016  
Trading Symbol gahc  
Amendment Flag false  
Entity Central Index Key 0001138724  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding 55,709,983  
Entity Public Float   $ 1,393,591
Entity Filer Category Smaller Reporting Company  
Entity Current Reporting Status Yes  
Entity Voluntary Filers Yes  
Entity Well-known Seasoned Issuer No  
Document Fiscal Year Focus 2016  
Document Fiscal Period Focus Q1  
XML 11 R2.htm IDEA: XBRL DOCUMENT v3.5.0.2
Global Arena Holding, Inc. and Subsidiaries - Consolidated Balance Sheets - USD ($)
Mar. 31, 2016
Dec. 31, 2015
Current Assets    
Cash $ 7,228 $ 48,400
Prepaid expenses 0 20,200
Total Current Assets 7,228 68,600
Other assets    
Security deposits 10,500 10,500
Deposit for proposed acquisition 30,000 20,000
Investment 284,270 284,270
Other assets 14,265 13,567
TOTAL ASSETS 346,263 396,937
Current Liabilities    
Accounts payable and accrued expenses 1,141,196 1,124,612
Convertible promissory notes payable, in default 50,000 280,000
Convertible promissory notes payable, net of debt discount of $265,229 and $76,789 1,572,396 1,270,829
Promissory notes payable, in default 230,000 230,000
Deferred revenue 154,630 387,410
Derivative liability 1,487,042 1,020,408
Total Current Liabilities 4,635,264 4,313,259
Convertible promissory notes payable, net of debt discount of $287,047 and $286,965 237,953 213,035
TOTAL LIABILITIES 4,873,217 4,526,294
Stockholders' (deficiency)    
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued outstanding 0 0
Common stock, $0.001 par value; 1,000,000,000 shares authorized; 55,709,983 and 50,628,209 shares issued and outstanding 55,710 50,628
Additional paid-in capital 13,138,718 13,045,187
Accumulated deficit (17,721,382) (17,225,172)
Total Stockholders' Deficit (4,526,954) (4,129,357)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 346,263 $ 396,937
XML 12 R3.htm IDEA: XBRL DOCUMENT v3.5.0.2
Global Arena Holding, Inc. and Subsidiaries - Consolidated Balance Sheets (Parentheticals) - $ / shares
Mar. 31, 2016
Dec. 31, 2015
Statement of Financial Position    
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 2,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 1,000,000,000 100,000,000
Common stock, shares issued 55,709,983 50,628,209
Common stock, shares outstanding 55,709,983 50,628,209
XML 13 R4.htm IDEA: XBRL DOCUMENT v3.5.0.2
Global Arena Holding, Inc. and Subsidiaries - Consolidated Statements of Operations - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
REVENUE    
Services $ 666,532 $ 10,655
OPERATING EXPENSES    
Salaries and benefits 61,730 69,385
Occupancy 13,389 43,742
Business development 110,139 90,856
Professional fees 124,529 179,737
Stock-based compensation 0 5,273
Office and other 265,569 15,327
Total Operating Expenses 575,356 404,320
(Loss) from operations 91,176 (393,665)
Other income (expense)    
Interest expense and financing costs (757,725) (340,250)
Change in fair value of derivative liability 170,339 (386,300)
Total other income (expense) (587,386) (726,550)
Loss before provision for taxes (496,210) (1,120,215)
Provision for income taxes 0 0
Net (loss) (496,210) (1,120,215)
Income attributable to noncontrolling interests 0 2,209
Net loss attributed to common stockholders $ (496,210) $ (1,122,424)
Weighted average number of shares outstanding: basic and diluted 52,872,664 24,136,693
Net (loss) per share $ (0.01) $ (0.05)
XML 14 R5.htm IDEA: XBRL DOCUMENT v3.5.0.2
Global Arena Holding, Inc. and Subsidiaries - Consolidated Statements of Cash Flows - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net (loss) $ (496,210) $ (1,120,215)
Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities:    
Amortization of debt discount 100,255 187,062
Stock-based compensation 0 5,273
Change in fair value of derivative liability (170,339) 386,300
Non-cash financing costs 341,898 0
Convertible promissory notes payable issued for penalty interest 194,137 0
Debt modification expense 52,306 0
Change in current assets and liabilities:    
Prepaid expenses and other current assets 20,200 12,889
Deferred revenue (232,780) 91,100
Accounts payable and accrued expenses 52,559 248,229
Net cash (used in) operating activities (137,974) (189,362)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of other assets (698) 0
Payment of deposit for acquisition (10,000) 0
Advances from related parties 0 7,300
Net cash (used in) provided by investing activities (10,698) 7,300
CASH FLOWS FROM FINANCING ACTIVITIES:    
Bank overdraft 0 32,244
Proceeds from promissory notes payable 0 175,000
Proceeds from convertible promissory notes payable 167,500 0
Repayment of convertible promissory notes payable (60,000) 0
Net cash provided by financing activities 107,500 207,244
Net change in cash (41,172) 25,182
Cash, beginning of period 48,400 54,977
Cash, end of period 7,228 80,159
Cash paid for:    
Interest 0 50
Income taxes 0 0
Non-cash investing and financing activities    
Allocated value of warrants and beneficial conversion features related to debt 630,675 143,827
Promissory note issued for consulting services 0 188,000
Debt converted to common stock 27,530 0
Accrued interest added to debt $ 10,900 $ 0
XML 15 R6.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 1. Organization
3 Months Ended
Mar. 31, 2016
Notes  
Note 1. Organization

1.  ORGANIZATION

 

Organization and Business

 

Global Arena Holding, Inc. (formerly, “Global Arena Holding Subsidiary Corp.”) (“GAHI”), was formed in February 2009, in the state of Delaware.  GAHI and its subsidiaries (the “Company”) was previously a financial services firm and currently is focusing on the following businesses through these subsidiaries:

 

On February 25, 2015, Global Election Services, Inc. (“GES”), a wholly owned subsidiary was incorporated in the State of Delaware. GES provides comprehensive technology-enabled election services primarily for organized labor associations.

 

On May 20, 2015, the Company incorporated a wholly owned subsidiary in the State of Delaware called “GAHI Acquisition Corp.”  This entity is to be the merger subsidiary for the potential acquisition of Blockchain Technologies Corp.

 

Global Arena Investment Management LLC (“GAIM”), a wholly owned subsidiary, provided investment advisory services to its clients.  GAIM was formally registered with the SEC as an investment advisor. This subsidiary is currently inactive.

 

Global Arena Commodities Corporation (“GACOM”), which is 100% owned by GAHI, ceased all operations in 2014 and the Company plans to close GACOM in 2016.

 

Basis of Presentation

 

The unaudited condensed consolidated financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission.  The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the financial condition of the Company and its operating results for the respective periods. The condensed consolidated balance sheet at December 31, 2015 has been derived from the Company's audited consolidated financial statements. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission. The results for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates the continuation of the Company as a going concern. The Company has generated recurring losses and cash flow deficits from its continuing operations since inception and has had to continually borrow to continue operating. In addition, with the sale of Global Arena Capital Corp. in August 2014, which was the Company’s principal operating business, the Company’s continuing operations are insufficient to support its ongoing activities. In addition, certain of the Company’s debt went into default and required extensions and adjustments to previously issued warrants and conversion prices.  Certain debt continues to be in default as of March 31, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or acquire or develop a business that generates sufficient positive cash flows from operations.  In May, 2015, the Company entered into an agreement and plan of merger with Blockchain Technologies Corporation (“BTC”), which holds provisional patents and intellectual property for creating a new 3D Blockchain technology. In October, 2015, the Company acquired 10% of the outstanding equity in BTC. The management of the Company is also in negotiations with other companies it believes could be beneficial to the Company’s operations. The Company continues to raise funds from the issuance of additional convertible promissory note. Management is hopeful that with its new focus on business acquisitions and their ability to raise additional funds that the Company should be able to continue as a going concern.

 

The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.

XML 16 R7.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2016
Notes  
Note 2. Summary of Significant Accounting Policies

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of GAHI and its wholly-owned and majority owned subsidiaries, GES, GAHI Acquisition Corp., GAIM, and GACOM.  All significant intercompany accounts and transactions have been eliminated in consolidation. 

 

Basic and Diluted Earnings (Loss) Per Share

 

Earnings per share is calculated in accordance with the ASC 260-10, Earnings Per Share. Basic earnings-per-share is based upon the weighted average number of common shares outstanding. Diluted earnings-per-share is based on the assumption that all dilutive convertible notes, stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.  The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.

 

 

March 31, 2016

March 31, 2015

Options

3,000,000

2,075,000

Warrants

65,670,263

38,136,449

Convertible notes

134,318,946

9,585,586

Total

202,989,209

49,797,035

 

Management Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.  Significant estimates reflected in the consolidated financial statements include, but are not limited to, share-based compensation, and assumptions used in valuing derivative liabilities. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents. 

 

Convertible Debt

 

Convertible debt is accounted for under FASB ASC 470, Debt – Debt with Conversion and Other Options. The Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital.  The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing stock options, except that the contractual life of the warrant is used. 

 

Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis.  The allocated fair value of the BCF and warrants are recorded as a debt discount and is accreted over the expected term of the convertible debt as interest expense. 

 

The Company accounts for modifications of its embedded conversion features in accordance with the ASC which requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.

 

Derivative Financial Instruments

 

The Company evaluates its financial instruments 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 in the statements of operations. The Company uses the Black-Scholes-Merton model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. 

 

Revenue Recognition

 

The Company’s revenue recognition policies comply with SEC revenue recognition rules and the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-10-S99. The Company earns revenues through various services it provides to its clients. GES’s income is recognized at the presentation date of the certification of the election results. The payments received in advance are recorded as deferred revenue on the balance sheet. Should an election not proceed, all non-refundable deferred revenue will be recognized as revenue.

 

Share-Based Compensation

 

The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company's Statements of Operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance where the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates.

 

Fair Value of Financial Instruments

 

FASB ASC 820, Fair Value Measurement defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability.  The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

 

Fair Value Measurements

 

The Company applies the provisions of ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:

 

 

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

 

 

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

 

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

Cash, accounts receivable, cash overdraft, accounts payable and accrued expenses and deferred revenue – The carrying amounts reported in the consolidated balance sheets for these items are a reasonable estimate of fair value due to their short term nature.

 

Promissory notes payable and convertible promissory notes payable – Promissory notes payable and convertible promissory notes payable are recorded at amortized cost.  The carrying amount approximates their fair value.

 

The Company uses Level 2 inputs for its valuation methodology for the beneficial conversion feature and warrant derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.

 

The following table presents the Company’s assets and liabilities required to be reflected within the fair value hierarchy as of March 31, 2016 and December 31, 2015.

 

 

 

Fair Value

 

Fair Value Measurements at

 

 

As of

 

March 31, 2016

Description

 

March 31, 2016

 

Using Fair Value Hierarchy

 

 

 

 

Level 1

 

Level 2

 

Level 3

Beneficial conversion feature

$

1,355,942

$

-

$

1,355,942

$

-

Warrant derivative 

 

131,100

 

 

 

131,100

 

 

 

 

 

 

 

 

 

 

 

Total

$

1,487,042

$

-

$

1,487,042

$

-

 

 

 

 

Fair Value

 

Fair Value Measurements at

 

 

As of

 

December 31, 2015

Description

 

December 31, 2015

 

Using Fair Value Hierarchy

 

 

 

 

Level 1

 

Level 2

 

Level 3

Beneficial conversion feature

$

611,200

$

-

$

611,200

$

-

Warrant derivative 

 

409,208

 

 

 

409,208

 

 

 

 

 

 

 

 

 

 

 

Total

$

1,020,408

$

-

$

1,020,408

$

-

 

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

 

Recently Issued Accounting Pronouncements

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. This pronouncement is effective for annual reporting periods beginning after December 15, 2016, and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements.

 

In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

 

In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

 

In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.  In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.

 

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not anticipate the adoption of this ASU will have a significant impact on its consolidated financial position, results of operations, or cash flows.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements.

 

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting, to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of this newly issued guidance to its consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.

XML 17 R8.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 3 - Investment
3 Months Ended
Mar. 31, 2016
Notes  
Note 3 - Investment

NOTE 3 - INVESTMENT

 

On October 20, 2015, the Company paid $125,000 in cash and issued to Nikolaos Spanos, 1,377,398 of its common stock (valued at $68,870) and 1,993,911 warrants to purchase its common shares at the exercise price of $0.10 per common share exercisable for three years (valued at $90,400).  The common shares and warrants are being issued for the purchase of 1,000,000 common shares of Blockchain Technologies Corporation (“BTC”).  Said common shares represent ten percent (10%) of the outstanding equity in BTC.  This investment is accounted for under the cost method.

XML 18 R9.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 4 - Promissory Notes Payable
3 Months Ended
Mar. 31, 2016
Notes  
Note 4 - Promissory Notes Payable

NOTE 4 - PROMISSORY NOTES PAYABLE

 

In March 2014, the Company issued two promissory notes for a total of $230,000. The interest rate is the short-term applicable federal rate as determined by the Internal Revenue Service for the calendar month plus 10%. These two promissory notes were expired on September 14, 2015 and are in default as of March 31, 2016.

XML 19 R10.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 5. Convertible Promissory Notes
3 Months Ended
Mar. 31, 2016
Notes  
Note 5. Convertible Promissory Notes

NOTE 5 - CONVERTIBLE PROMISSORY NOTES PAYABLE

 

Convertible promissory notes payable at March 31, 2016 and December 31, 2015 consist of the following:

 

 

 

March 31, 2016

 

December 31, 2015

Convertible promissory notes with interest at 12% per annum, convertible into common shares at a fixed price ranging from $0.02 to $0.10 per share. Maturity dates range from April 30, 2016 to November 11, 2018

$

1,492,500

$

1,262,500

Convertible promissory notes with interest at 12% per annum, convertible into common shares at a fixed price ranging from $0.06 to $0.14 per share. These convertible promissory notes are currently in default. (default as of March 31, 2016)

 

50,000

 

280,000

Convertible promissory notes with interest at 12% per annum, convertible into common shares at a price ranging from $0.08 to $0.14 or a 50% discount from the lowest trade price in the 20 trading days prior to conversion (as of March 31, 2016 the conversion price would be $0.0081 per share)

 

742,625

 

335,118

Convertible promissory notes with interest at 8% per annum, convertible into common shares at a fixed price of $0.02 per share. The maturity date is April 30, 2016.

 

250,000

 

250,000

Total convertible promissory notes payable

 

2,535,125

 

2,127,618

Unamortized debt discount

 

(552,276)

 

(363,754)

Convertible promissory notes payable, net discount

 

1,982,849

 

1,763,864

Less notes receivable collateralized by convertible promissory notes payable

 

(122,500)

 

-

 

 

1,860,349

 

1,763,864

Less current portion

 

(1,622,396)

 

(1,550,829)

Long-term portion

$

237,953

$

213,035

 

During the three months ended March 31, 2016, the Company issued four convertible promissory notes payable totaling $245,000 to one investor for which the Company received $122,500 in cash and notes receivable from the same investor totaling $122,500.  Since the notes receivable were issued to the Company as payment for certain convertible promissory notes payable, the Company has not presented these notes receivable as an asset, but as an offset to the convertible promissory notes payable balance. In addition to the above four convertible promissory notes payable, during the three months ended March 31, 2016, the Company issued two additional convertible promissory notes payable to two other investors for gross proceeds of $45,000.

 

A rollfoward of the convertible promissory notes payable from December 31, 2015 to March 31, 2016 is below:

 

Convertible promissory notes payable, December 31, 2015

$

1,763,864

Issued for cash

167,500

Issued for penalty interest

194,137

Issued for capitalized interest

10,900

Repayment for cash

(60,000)

Conversion to common stock

(27,530)

Debt discount related to new convertible promissory notes

(288,777)

Amortization of debt discounts

100,255

Convertible promissory notes payable, March 31, 2016

$

1,860,349

 

XML 20 R11.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 6 - Derivative Financial Instruments
3 Months Ended
Mar. 31, 2016
Notes  
Note 6 - Derivative Financial Instruments

NOTE 6 - DERIVATIVE FINANCIAL INSTRUMENTS

 

On December 31, 2012, in connection with an extension of the maturity date of certain convertible notes which were due on May 31, 2012, the Company issued the holder a warrant to purchase shares of common stock of the Company not exceeding 9.99% of the issued and outstanding shares and potential issuable shares related to outstanding options, warrants and convertible debt of the Company. The Company determined that the anti-dilution provision feature of the warrants to be an embedded derivative instrument.  This derivative is adjusted to fair value at each balance sheet with the changes in fair value recognized in operations.   In addition, certain of the Company’s convertible promissory notes payable are convertible into shares of the Company’s common stock at a percentage of the market price on the date of conversion.  The Company has determined that the variable conversion rate is an embedded derivative instrument. The Company uses the Black-Scholes valuation method to value the derivative instruments at inception and on subsequent valuation dates. Weighted average assumptions used to estimate fair values are as follows:

 

 

March 31, 2016

December 31, 2015

Risk-free interest rate

0.59%

0.16%

Expected life of the options (Years)

0.55

0.25

Expected volatility

411%

211%

Expected dividend yield

0%

0%

 

 

 

Fair Value

1,487,042

1,020,408

 

For the three months ended March 31, 2016 and 2015, the Company recognized a change in this derivative liability of $170,339 and $(386,300), respectively, in other income (expense).

XML 21 R12.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 7- Stockholders' Deficit
3 Months Ended
Mar. 31, 2016
Notes  
Note 7- Stockholders' Deficit

NOTE 7- STOCKHOLDERS’ DEFICIT

 

Common Stock

 

On April 28, 2016 the stockholders approved an amendment to the Company’s articles of incorporation to increase the number of authorized common shares from 100,000,000 to 1,000,000,000. In addition, the stockholders also approved an amendment to the Company’s Stock Awards Plan, originally filed June 27, 2011, which will increase the number of shares authorized to be issued under the Plan from 3,000,000 shares to 7,460 ,000 shares.

 

During the three months ended March 31, 2016, the Company issued 5,081,774 shares of common stock for convertible promissory notes payable of $27,530.

 

During the three months ended March 31, 2016, the Company extended the due date of certain convertible promissory notes payable.  In consideration of extending the due dates, the Company lowered the conversion price for certain convertible promissory notes payable and lowered the exercise price of certain warrants.  The Company took a charge to earnings of $52,306 which represents the change in fair value of the conversion features and warrants between the old terms and the new terms.

 

Option Activity

 

A summary of the option activity is presented below:

 

 

 

 

Weighted

 

 

 

Weighted

Average

 

 

 

Average

Remaining

Aggregate

 

Number of

Exercise

Contractual

Intrinsic

 

Options

Price ($)

Life (in years)

Value ($)

Outstanding, December 31, 2015

3,000,000

0.07

4.63

-

Granted

-

 

 

 

Exercised

-

 

 

 

Forfeited/Canceled

-

 

 

 

Outstanding, March 31, 2016

3,000,000

0.07

4.38

-

Exercisable, March 31, 2016

3,000,000

0.07

4.38

-

 

Warrant Activity

 

A summary of warrant activity is presented below:

 

 

 

 

Weighted

 

 

 

Weighted

Average

 

 

 

Average

Remaining

Aggregate

 

Number of

Exercise

Contractual

Intrinsic

 

Warrants

Price ($)

Life (in years)

Value ($)

Outstanding, December 31, 2015

64,586,931

0.15

2.33

666,279

Granted

1,083,332

 

 

 

Exercised

-

 

 

 

Forfeited/Canceled

-

 

 

 

Outstanding, March 31, 2016

65,670,263

0.14

2.09

146,609

Exercisable, March 31, 2016

65,670,263

0.14

2.09

146,609

 

During the three months ended March 31, 2016, the Company issued a total of 1,083,332 warrants in connection with a new convertible note and an extension to an existing convertible note. The fair values of the warrants were determined using the Black-Scholes option pricing model with the following assumptions:

 

•           Expected life of 3.0 years

•           Volatility of 439%;

•           Dividend yield of 0%;

•           Risk free interest rate of 1.05%

XML 22 R13.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 8 - Commitments and Contingencies
3 Months Ended
Mar. 31, 2016
Notes  
Note 8 - Commitments and Contingencies

NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

The Company may be involved in legal proceedings in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.

 

On October 10, 2013, GACOM settled a complaint with the National Futures Association for a fine of $50,000 for certain noncompliance with Commodity Futures Trading Commission regulations.  The fine has not been paid and is included in accounts payable and accrued expenses at March 31, 2106 and December 31, 2015. 

 

Named directors, officers, employees and/or registered representatives of GACC have been called before FINRA for on-the-record interviews in connection with certain FINRA inquiries. GACC has responded to multiple requests for documents and FINRA has taken on-the-record testimony. On October 27, 2014, FINRA indicated that it might recommend enforcement proceedings against GACC, our chairman John Matthews and Brian Joseph Hagerman, the former president and chief compliance officer of GACC. FINRA’s action is commonly referred to as a “Wells Notice” and is a preliminary determination by FINRA staff to recommend disciplinary action against GACC and these individuals.  FINRA is not proposing disciplinary action against the Company.  The allegations are against GACC and these individuals and assert that there were violations of Sections 17(a)(2) and 5 of the Securities Act of 1933 (“Securities Act”); NASD Rules 3010 and 3040; and FINRA Rules 2010, 5122(b)(2) and 5122(b)(1)(B).  GACC and Messrs. Matthews and Hagerman are responding to this Wells Notice and believe that they have meritorious arguments.

 

On April 10, 2014, the Legal Section of FINRA formally notified GACC that it had made a preliminary determination to recommend that disciplinary action be brought against GACC for (1) failing to buy and sell corporate bonds at prices that were fair; and (2) failing to have in place a supervisory system that was reasonably designed to achieve compliance with applicable securities laws and regulations and FINRA rules.  GACC has responded and intends to contest this matter.

 

On February 11, 2015, John S. Matthews was advised by the staff of FINRA’s Department of Enforcement (the “Staff”) that they intended to recommend that FINRA commence a disciplinary action against Mr. Matthews, in his former capacity as an executive of GACC for a violation of FINRA Rules 2010 and 8210 by failing to provide information to the Staff in what the Staff considered to be a timely manner. Mr. Matthews provided additional materials to FINRA subsequent to the February 11, 2015 notice and submitted a response to the Staff’s allegations on February 25, 2015, disputing the proposed charges against him. Mr. Matthews has at all times cooperated with the Staff’s inquiries and continues to do so.

 

On December 1, 2015, John S. Matthews, the chief executive officer and director, signed a "Letter of Acceptance, Waiver and Consent ("AWC") with FINRA consenting to the entry of findings by FINRA, without admitting or denying any wrongdoing, that he did not provide any written disclosures to, or receive any written approval from, his member firm prior to selling promissory notes issued by the Company, some of the investors were not qualified purchasers as defined in Section 2(a)(51)(A) of the Investment Company Act, and the sales were not exempt from the requirements of FINRA Rule 5122, and he willfully failed to disclose an unsatisfied $25,590 federal tax lien within 30 days.   The AWC was accepted by FINRA on December 2, 2015.

 

As a result of the AWC, Mr. Matthews is subject to a six-month suspension from association with any FINRA member, and a fine of $25,000.  As such, Mr. Matthews is statutorily disqualified with respect to association with a FINRA member.

 

As a result of the AWC, the registrant is statutorily disqualified from relying in the future on certain exemptions from registration of its securities promulgated under Rule 506 of the Securities Act of 1933 (the "Act") for the length of the suspension as long as Mr. Matthews remains an officer and/or director and/or holder of 10% or more of the voting securities of the registrant.

 

On November 5, 2015, one of the Company’s prior attorneys commenced an action against GAHI, seeking payment of $27,518 in unpaid legal fees. This amount is included in accounts payable. At this time, management is unable to determine what the ultimate outcome of these proceedings will be and whether there will be a material impact on the Company’s operations or the consolidated financial statements.

 

On December 23, 2014, one of the Company’s prior attorneys commenced an action against GACC, GAHI, and PMC Capital seeking payment of $150,019 in unpaid legal fees. This amount is included in accounts payable. At this time, management is unable to determine what the ultimate outcome of these proceedings will be and whether there will be a material impact on the Company’s operations or the consolidated financial statements.

 

On July 2, 2014, an action was commenced by a group of individuals against GACC, the Company, and the chief executive officer of the Company, which asserts claims for minimum wage and overtime violations under New York State Labor Law, and seeks damages in an amount to be determined at trial, plus interest, attorneys’ fees and costs. At this time, the Company is unable to determine the ultimate outcome of the demand or whether it will result in a formal proceeding or action against the Company or any of its officers.

 

The Company and certain of its officers were named in connection with a demand for repayment of $695,000 by PMC LLC, in a letter dated October 16, 2014 relating to the Stock Purchase Agreement by and among GAHI and PMC Capital, LLC and Barbara Desiderio, dated as of August 5, 2014. The demand seeks repayment for expenditures made by GACC prior to the sale and the failure to meet certain minimum requirements in the Stock Purchase Agreement. At this time, the Company is unable to determine the ultimate outcome of the demand or whether it will result in a formal proceeding or action against the Company or any of its officers.

XML 23 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 9- Subsequent Events
3 Months Ended
Mar. 31, 2016
Notes  
Note 9- Subsequent Events

NOTE 9– SUBSEQUENT EVENTS

 

On April 28, 2016, the Company received a total of $130,000 from various investors for the subscription of investment units at $0.01 per unit. Each unit contains two common shares, one A warrant and one B warrant. The Company issued a total of 13,000,000 common shares, 6,500,000 A warrants and 6,500,000 B warrants to these investors.   Each A warrant is exercisable into one common share of the Company at $0.02 per common share with an exercise period of three years.  Each B warrant is exercisable into one common share of the Company at $0.03 per common share with an exercise period of three years.

 

Subsequent to March 31, 2016, the Company issued 8,084,904 shares of common stock in connection with the conversion of convertible promissory notes payable and accrued interest totaling $13,495.

XML 24 R15.htm IDEA: XBRL DOCUMENT v3.5.0.2
Going Concern (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Going Concern

Going Concern

 

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates the continuation of the Company as a going concern. The Company has generated recurring losses and cash flow deficits from its continuing operations since inception and has had to continually borrow to continue operating. In addition, with the sale of Global Arena Capital Corp. in August 2014, which was the Company’s principal operating business, the Company’s continuing operations are insufficient to support its ongoing activities. In addition, certain of the Company’s debt went into default and required extensions and adjustments to previously issued warrants and conversion prices.  Certain debt continues to be in default as of March 31, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or acquire or develop a business that generates sufficient positive cash flows from operations.  In May, 2015, the Company entered into an agreement and plan of merger with Blockchain Technologies Corporation (“BTC”), which holds provisional patents and intellectual property for creating a new 3D Blockchain technology. In October, 2015, the Company acquired 10% of the outstanding equity in BTC. The management of the Company is also in negotiations with other companies it believes could be beneficial to the Company’s operations. The Company continues to raise funds from the issuance of additional convertible promissory note. Management is hopeful that with its new focus on business acquisitions and their ability to raise additional funds that the Company should be able to continue as a going concern.

 

The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.

XML 25 R16.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Principles of Consolidation (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Principles of Consolidation

Principles of Consolidation

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of GAHI and its wholly-owned and majority owned subsidiaries, GES, GAHI Acquisition Corp., GAIM, and GACOM.  All significant intercompany accounts and transactions have been eliminated in consolidation. 

XML 26 R17.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Basic and Diluted Earnings (loss) Per Share (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Basic and Diluted Earnings (loss) Per Share

Basic and Diluted Earnings (Loss) Per Share

 

Earnings per share is calculated in accordance with the ASC 260-10, Earnings Per Share. Basic earnings-per-share is based upon the weighted average number of common shares outstanding. Diluted earnings-per-share is based on the assumption that all dilutive convertible notes, stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.  The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.

 

 

March 31, 2016

March 31, 2015

Options

3,000,000

2,075,000

Warrants

65,670,263

38,136,449

Convertible notes

134,318,946

9,585,586

Total

202,989,209

49,797,035

 

XML 27 R18.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Management Estimates (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Management Estimates

Management Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.  Significant estimates reflected in the consolidated financial statements include, but are not limited to, share-based compensation, and assumptions used in valuing derivative liabilities. Actual results could differ from those estimates.

XML 28 R19.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Cash and Cash Equivalents

Cash and Cash Equivalents

 

The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents. 

XML 29 R20.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Convertible Debt (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Convertible Debt

Convertible Debt

 

Convertible debt is accounted for under FASB ASC 470, Debt – Debt with Conversion and Other Options. The Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that has conversion features at fixed or adjustable rates that are in-the-money when issued and records the relative fair value of any warrants issued with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to the warrants and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features, both of which are credited to additional paid-in capital.  The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing stock options, except that the contractual life of the warrant is used. 

 

Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis.  The allocated fair value of the BCF and warrants are recorded as a debt discount and is accreted over the expected term of the convertible debt as interest expense. 

 

The Company accounts for modifications of its embedded conversion features in accordance with the ASC which requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.

XML 30 R21.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Derivative Financial Instruments (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Derivative Financial Instruments

Derivative Financial Instruments

 

The Company evaluates its financial instruments 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 in the statements of operations. The Company uses the Black-Scholes-Merton model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. 

XML 31 R22.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Revenue Recognition (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Revenue Recognition

Revenue Recognition

 

The Company’s revenue recognition policies comply with SEC revenue recognition rules and the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-10-S99. The Company earns revenues through various services it provides to its clients. GES’s income is recognized at the presentation date of the certification of the election results. The payments received in advance are recorded as deferred revenue on the balance sheet. Should an election not proceed, all non-refundable deferred revenue will be recognized as revenue.

XML 32 R23.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Stock-based Compensation (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Stock-based Compensation

Share-Based Compensation

 

The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company's Statements of Operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance where the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates.

XML 33 R24.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

FASB ASC 820, Fair Value Measurement defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability.  The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

XML 34 R25.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Fair Value Measurement, Policy (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Fair Value Measurement, Policy

Fair Value Measurements

 

The Company applies the provisions of ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:

 

 

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

 

 

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

 

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

Cash, accounts receivable, cash overdraft, accounts payable and accrued expenses and deferred revenue – The carrying amounts reported in the consolidated balance sheets for these items are a reasonable estimate of fair value due to their short term nature.

 

Promissory notes payable and convertible promissory notes payable – Promissory notes payable and convertible promissory notes payable are recorded at amortized cost.  The carrying amount approximates their fair value.

 

The Company uses Level 2 inputs for its valuation methodology for the beneficial conversion feature and warrant derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.

 

The following table presents the Company’s assets and liabilities required to be reflected within the fair value hierarchy as of March 31, 2016 and December 31, 2015.

 

 

 

Fair Value

 

Fair Value Measurements at

 

 

As of

 

March 31, 2016

Description

 

March 31, 2016

 

Using Fair Value Hierarchy

 

 

 

 

Level 1

 

Level 2

 

Level 3

Beneficial conversion feature

$

1,355,942

$

-

$

1,355,942

$

-

Warrant derivative 

 

131,100

 

 

 

131,100

 

 

 

 

 

 

 

 

 

 

 

Total

$

1,487,042

$

-

$

1,487,042

$

-

 

 

 

 

Fair Value

 

Fair Value Measurements at

 

 

As of

 

December 31, 2015

Description

 

December 31, 2015

 

Using Fair Value Hierarchy

 

 

 

 

Level 1

 

Level 2

 

Level 3

Beneficial conversion feature

$

611,200

$

-

$

611,200

$

-

Warrant derivative 

 

409,208

 

 

 

409,208

 

 

 

 

 

 

 

 

 

 

 

Total

$

1,020,408

$

-

$

1,020,408

$

-

 

XML 35 R26.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Income Taxes (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Income Taxes

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

XML 36 R27.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Recently Issued Accounting Pronouncements (Policies)
3 Months Ended
Mar. 31, 2016
Policies  
Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. This pronouncement is effective for annual reporting periods beginning after December 15, 2016, and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements.

 

In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

 

In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

 

In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.  In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.

 

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not anticipate the adoption of this ASU will have a significant impact on its consolidated financial position, results of operations, or cash flows.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements.

 

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting, to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of this newly issued guidance to its consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.

XML 37 R28.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Basic and Diluted Earnings (loss) Per Share: Schedule of shares excluded as being anti-dilutive (Tables)
3 Months Ended
Mar. 31, 2016
Tables/Schedules  
Schedule of shares excluded as being anti-dilutive

 

 

March 31, 2016

March 31, 2015

Options

3,000,000

2,075,000

Warrants

65,670,263

38,136,449

Convertible notes

134,318,946

9,585,586

Total

202,989,209

49,797,035

XML 38 R29.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Fair Value Measurement, Policy: Assets and liabilities required to be reflected within the fair value hierarchy (Tables)
3 Months Ended
Mar. 31, 2016
Tables/Schedules  
Assets and liabilities required to be reflected within the fair value hierarchy

 

 

 

Fair Value

 

Fair Value Measurements at

 

 

As of

 

March 31, 2016

Description

 

March 31, 2016

 

Using Fair Value Hierarchy

 

 

 

 

Level 1

 

Level 2

 

Level 3

Beneficial conversion feature

$

1,355,942

$

-

$

1,355,942

$

-

Warrant derivative 

 

131,100

 

 

 

131,100

 

 

 

 

 

 

 

 

 

 

 

Total

$

1,487,042

$

-

$

1,487,042

$

-

 

 

 

 

Fair Value

 

Fair Value Measurements at

 

 

As of

 

December 31, 2015

Description

 

December 31, 2015

 

Using Fair Value Hierarchy

 

 

 

 

Level 1

 

Level 2

 

Level 3

Beneficial conversion feature

$

611,200

$

-

$

611,200

$

-

Warrant derivative 

 

409,208

 

 

 

409,208

 

 

 

 

 

 

 

 

 

 

 

Total

$

1,020,408

$

-

$

1,020,408

$

-

XML 39 R30.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 5. Convertible Promissory Notes: Convertible Debt (Tables)
3 Months Ended
Mar. 31, 2016
Tables/Schedules  
Convertible Debt

 

 

 

March 31, 2016

 

December 31, 2015

Convertible promissory notes with interest at 12% per annum, convertible into common shares at a fixed price ranging from $0.02 to $0.10 per share. Maturity dates range from April 30, 2016 to November 11, 2018

$

1,492,500

$

1,262,500

Convertible promissory notes with interest at 12% per annum, convertible into common shares at a fixed price ranging from $0.06 to $0.14 per share. These convertible promissory notes are currently in default. (default as of March 31, 2016)

 

50,000

 

280,000

Convertible promissory notes with interest at 12% per annum, convertible into common shares at a price ranging from $0.08 to $0.14 or a 50% discount from the lowest trade price in the 20 trading days prior to conversion (as of March 31, 2016 the conversion price would be $0.0081 per share)

 

742,625

 

335,118

Convertible promissory notes with interest at 8% per annum, convertible into common shares at a fixed price of $0.02 per share. The maturity date is April 30, 2016.

 

250,000

 

250,000

Total convertible promissory notes payable

 

2,535,125

 

2,127,618

Unamortized debt discount

 

(552,276)

 

(363,754)

Convertible promissory notes payable, net discount

 

1,982,849

 

1,763,864

Less notes receivable collateralized by convertible promissory notes payable

 

(122,500)

 

-

 

 

1,860,349

 

1,763,864

Less current portion

 

(1,622,396)

 

(1,550,829)

Long-term portion

$

237,953

$

213,035

XML 40 R31.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 5. Convertible Promissory Notes: Schedule of rollfoward of the convertible promissory notes payable (Tables)
3 Months Ended
Mar. 31, 2016
Tables/Schedules  
Schedule of rollfoward of the convertible promissory notes payable

 

Convertible promissory notes payable, December 31, 2015

$

1,763,864

Issued for cash

167,500

Issued for penalty interest

194,137

Issued for capitalized interest

10,900

Repayment for cash

(60,000)

Conversion to common stock

(27,530)

Debt discount related to new convertible promissory notes

(288,777)

Amortization of debt discounts

100,255

Convertible promissory notes payable, March 31, 2016

$

1,860,349

XML 41 R32.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 7- Stockholders' Deficit: Schedule of Share-based Compensation, Stock Options, Activity (Tables)
3 Months Ended
Mar. 31, 2016
Tables/Schedules  
Schedule of Share-based Compensation, Stock Options, Activity

 

 

 

 

Weighted

 

 

 

Weighted

Average

 

 

 

Average

Remaining

Aggregate

 

Number of

Exercise

Contractual

Intrinsic

 

Options

Price ($)

Life (in years)

Value ($)

Outstanding, December 31, 2015

3,000,000

0.07

4.63

-

Granted

-

 

 

 

Exercised

-

 

 

 

Forfeited/Canceled

-

 

 

 

Outstanding, March 31, 2016

3,000,000

0.07

4.38

-

Exercisable, March 31, 2016

3,000,000

0.07

4.38

-

XML 42 R33.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 7- Stockholders' Deficit: Schedule of warrant activity (Tables)
3 Months Ended
Mar. 31, 2016
Tables/Schedules  
Schedule of warrant activity

 

 

 

 

Weighted

 

 

 

Weighted

Average

 

 

 

Average

Remaining

Aggregate

 

Number of

Exercise

Contractual

Intrinsic

 

Warrants

Price ($)

Life (in years)

Value ($)

Outstanding, December 31, 2015

64,586,931

0.15

2.33

666,279

Granted

1,083,332

 

 

 

Exercised

-

 

 

 

Forfeited/Canceled

-

 

 

 

Outstanding, March 31, 2016

65,670,263

0.14

2.09

146,609

Exercisable, March 31, 2016

65,670,263

0.14

2.09

146,609

XML 43 R34.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 2. Summary of Significant Accounting Policies: Basic and Diluted Earnings (loss) Per Share: Schedule of shares excluded as being anti-dilutive (Details) - USD ($)
Mar. 31, 2016
Mar. 31, 2015
Details    
Anti-dilutive options $ 3,000,000 $ 2,075,000
Anti-dilutive warrants 65,670,263 38,136,449
Anti-dilutive convertible notes 134,318,946 9,585,586
Total anti-dilutive securities $ 202,989,209 $ 49,797,035
XML 44 R35.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 3 - Investment (Details)
Oct. 20, 2015
USD ($)
$ / shares
shares
Details  
Cash Paid to Nikolaos Spanos | $ $ 125,000
Common Stock Issued to Nikolaos Spanos 1,377,398
Warrants Issued to Nikolaos Spanos 1,993,911
Exercise Price of Warrants Issued to Nikolaos Spanos | $ / shares $ 0.10
XML 45 R36.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 5. Convertible Promissory Notes: Convertible Debt (Details) - USD ($)
Mar. 31, 2016
Dec. 31, 2015
Details    
Convertible promissory notes with interest at 12% per annum $ 1,492,500 $ 1,262,500
Convertible promissory notes with interest at 12% per annum in default 50,000 280,000
Convertible promissory notes with interest at 12% per annum with 50% discount 742,625 335,118
Convertible promissory notes with interest at 8% per annum 250,000 250,000
Total convertible promissory notes payable 2,535,125 2,127,618
Unamortized debt discount (552,276) (363,754)
Convertible promissory notes payable, net discount 1,982,849 1,763,864
Less notes receivable collateralized by convertible promissory notes payable (122,500)  
Less current portion of promissory notes amounts due (1,622,396) (1,550,829)
Long term portion of promissory notes amounts due $ 237,953 $ 213,035
XML 46 R37.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 6 - Derivative Financial Instruments (Details) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Details      
Risk-free interest rate 0.59%   0.16%
Expected life of the options (Years) 0.55   0.25
Expected volatility 411.00%   211.00%
Expected dividend yield 0.00%   0.00%
Fair Value $ 1,487,042   $ 1,020,408
Change in this derivative liability $ 170,339 $ (386,300)  
XML 47 R38.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 7- Stockholders' Deficit (Details)
3 Months Ended
Mar. 31, 2016
USD ($)
shares
Details  
Common stock issued for convertible notes payable | shares 5,081,774
value of common stock issued for convertible notes payable $ 27,530
Change in fair value of the conversion features and warrants 52,306
Warrants issued in connection to convertible notes $ 1,083,332
XML 48 R39.htm IDEA: XBRL DOCUMENT v3.5.0.2
Note 9- Subsequent Events (Details) - USD ($)
Apr. 28, 2016
Apr. 01, 2016
Details    
Amounts received from sale of investment units $ 130,000  
Price per investment unit $ 0.01  
Common shares issued 13,000,000  
Series A warrants issued 6,500,000  
Series B warrants issued 6,500,000  
Common shares issued upon conversion of convertible promissory notes payable   8,084,904
Value of promissory notes converted into common shares   $ 13,495
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