SUBSEQUENT EVENTS

Offering of Unsecured Non-Convertible Notes

On April 6, 2017, the Company entered into a note agreement in the amount of $103,000, with one accredited investor, in exchange for $100,000 gross proceeds. The note bears interest at 10% per annum and matures on October 6, 2017. Principal and interest on this note are payable at maturity. This note is not convertible into equity shares of the Company and is unsecured.

On April 21, 2017, the Company entered into a note agreement in the amount of $300,000, with one accredited investor, in exchange for $300,000 gross proceeds. The note bears interest at 12% per annum and matures on October 23, 2017. Principal and interest on this note are payable at maturity. This note is not convertible into equity shares of the Company and is unsecured.

On May 8, 2017, the Company issued a $125,000 note to one accredited investor in exchange for $125,000 of gross proceeds. This investor note (i) will mature September 8, 2017 and (ii) will bear interest at a rate of 12% per annum. Principal and interest on this note are payable at maturity. This note is not convertible into equity shares of the Company. This note is unsecured.

Forbearance and Settlement Agreement on July 2016 Convertible Notes

On May 5, 2017, the Company entered into a Forbearance and Settlement Agreement with a holder of certain secured convertible notes that are in default due to various triggering events. The holder and the Company agreed to forbear from taking any action provided for under the secured convertible notes in exchange for the following terms provided in this agreement:


•	The Company agreed to redeem for cash all secured convertible notes of the Company held by the holder no later than September 1, 2017.


•	The Company affirmed that the current balance of owed principal and accrued and unpaid interest to the holder is $1,790,213.91 as of May 2, 2017.


•	The redemption price for such secured convertible notes shall be 120% (if redeemed on or prior to August 15, 2017)or 125% (if redeemed after August 15, 2017) of the then outstanding principal, plus any accrued and unpaid interest.


•	During the month of May 2017, the Holder agreed to limit its conversions of outstanding Company secured convertible notes to $50,000 per calendar week of principal/interest.


•	During the months of June, July and August 2017, the holder agreed to limit its conversions of outstanding Company secured convertible notes to $75,000 per calendar week of principal/interest.


•	During the months of May, June, July and August 2017, the holder agreed that all outstanding Company secured convertible notes shall bear interest at the normal stated, rather than default, interest rate.


•	All conversions during the months of May, June, July and August 2017 will be at the “triggering event” discount conversion price as stated in the secured convertible notes, and will continue at the “triggering event” discount price until, if and when the notes are redeemed.


•	Should the Company fail to redeem for cash all secured convertible notes on or before September 1, 2017, default interest and normal stated interest will accrue from the date of execution of this agreement.

Exchange of Series J Preferred Stock for Common Stock

On May 10, 2017, the Company agreed to issue 189,484,143 shares of Common Stock to one accredited investor in exchange for the cancellation of 50 shares of outstanding Series J Preferred Stock (including accrued dividends) held by such investor. The canceled shares of the Series J Preferred Stock had an original issue price of $50,000.

Update on Series K Preferred Stock Funding

As of May 17, 2017, the Company had issued 1,200 shares of Series K Preferred Stock in exchange for $1,200,000 in proceeds.