23.

SUBSEQUENT EVENTS

On July 1, 2014, the court granted dismissal of the final remaining complaint asserted by UBS as referenced in Note 16. COMMITMENTS AND CONTINGENCIES. Associated with the dismissal, the Company reversed in the third quarter of 2014, related prepaid inventory and convertible debenture (ref 3) resulting in a loss on settlement of $14,850, which was accrued as of June 30, 2014.

On July 31, 2014, Mr. Alexander F. Purdon, was issued 834,061 shares of restricted common stock in lieu of cash for $4,500 employee compensation for the month of July 2014. The number of shares issued was based on the weighted average share price during the month.

Conversions of debentures to shares of common stock occurred subsequent to June 30, 2014. The stock was issued upon partial conversion of a convertible note without restrictive legend pursuant to Rule 144, as the holder acquired convertible note issued by the Company more than six months prior to the date of conversion and did not pay any additional consideration for the shares. Conversions were as follows (ref. number corresponds to lender reference number in Note 12. CONVERTIBLE DEBENTURES):

Ref (4) lender –

On July 2, 2014 the lender converted $1,705 of its debenture to 897,368 shares.

On August 12, 2014, the lender converted $2,580 of its debenture to 1,172,727 shares.

Ref (14) lender –

On July 3, 2014, the lender converted $3,142 of its debenture to 2,276,812 shares.

On July 25, 2014, the lender converted $3,327 of its debenture to 1,680,348 shares.

On July 15, 2014, the Company was provided a 90 Day Lease Termination notice from its Landlord as allowed and in accordance with terms of its lease agreement whereby either party can provide 90-day notice terminating lease. Accordingly, the Company must vacate the premises by October 15, 2014, and does not anticipate any issues in vacating. The Company is currently in process of locating a suitable facility for relocation of its headquarters and operations.