[1]

Prepayment Penalties. In addition to the principal balance shown, certain debt agreements provide for prepayment penalties up to 20% if the debt is repaid prior to the maturity date.

[2]

Unamortized Discounts. Original issue discounts ("OID") are amortized to interest expense using the effective interest method. The unamortized discount represents the portion of OID that will be charged to interest expense over the remaining term of the respective debt agreements.

[3]

Interest Rate. The stated interest rate is the contractual rate of interest specified in the debt agreement. For variable rate debt and amended debt agreements, the rate in effect as of December 31, 2015 is shown. For debt paid off during the year ended December 31, 2015, the rate in effect on December 31, 2014 is shown. See also Note 8 for accounting for the fair value of compound embedded derivatives and detachable common stock purchase warrants that are bifurcated from the host debt agreement and accounted for at fair value.

[4]

Credit Agreements. In April 2015, the Company entered into credit agreements with (i) Calm Waters Partnership ("Calm Waters"), an institutional investor and (ii) a group of 15 investors (the "Additional Lenders"), on substantially identical terms, pursuant to which Calm Waters made term loans to the Company of $35,000 and the Additional Lenders made term loans of $6,214 (collectively referred to as the "April Term Loans"). In June 2015, the Company and Calm Waters entered into an amendment that provided for an additional term loan (the "June Term Loan") of $6,000. In October 2015, the Company and Calm Waters entered into an amendment that provided for an additional term loan (the "October Term Loan") of $18,000. The April, June and October Term Loans mature in April 2018 and bear interest at the rate of 12.0% per annum. Upon repayment of the Bridge Financing Notes discussed in Note 7(c), the holders agreed to cancel related warrants received in such financings for 18,428,316 shares of the Company's common stock exercisable at $0.45 per share. See Note 8 for further information on the Company's warrants and see Note 17 for a January 2016 amendment to the Calm Waters credit agreement.

[5]

Convertible to Common Stock. The outstanding principal balance and accrued interest of the Convertible Debt is convertible to shares of the Company's common stock. Additional details about outstanding convertible debt agreements are summarized in Note 7(c).

[6]

VIP Promissory Notes. In April 2014, the Company issued $11,000 of promissory notes (the "VIP Promissory Notes") in connection with the acquisition of VIP. The VIP Promissory Notes provided for interest at 10.0% and matured in December 2014. During 2014, additional consideration of $5,000 was also due under an earnout provision in the acquisition agreement. In April 2015, the VIP Promissory Notes were amended whereby the Company agreed to combine the $5,000 earnout (which provides for interest at 3.5% per annum) into the VIP Promissory Notes. Under the amended terms, the Company agreed to make principal payments of (i) $8,000 in April 2015, (ii) $300 per month from October 2016 through November 2017, and (iii) accrued interest and any remaining principal balance is payable in December 2017. In addition, the Company made a principal payment of $100 in January 2015, plus an additional $500 as a concession to obtain the October Term Loan discussed above, resulting in an outstanding principal balance of $7,400 as of December 31, 2015.

[7]

ExWorks Revolving Loan. On June 30, 2015, the Company entered into a credit agreement with ExWorks Capital Fund I, L.P. ("ExWorks"). The credit agreement provides for a revolving line of credit (the "Revolving Loan Agreement") with a total commitment up to $6,000. The borrowing base is equal to (i) up to 75% of eligible accounts receivable and inventory of certain of the Company's U.S. based subsidiaries (up to a maximum of $4,000), plus (ii) up to 75% of the value of eligible inventory of certain of the Company's U.K based subsidiaries (up to a maximum of $2,500), minus (iii) certain availability reserves as determined by ExWorks. The advance rate against eligible accounts is subject to reduction based on credits, returned goods and setoffs. Borrowings under the Revolving Loan Agreement bear interest at an effective annual rate of 27.0% per annum. Borrowings under the Revolving Loan Agreement are collateralized by a first lien security interest in certain inventories and receivables. Either party may elect to terminate the Revolving Loan on June 30, 2016; however, if neither party elects to terminate, the agreement will be automatically extended for an additional 12 months. On September 29, 2015, the Company entered into an amendment to the Revolving Loan Agreement, whereby ExWorks agreed that during the four-month period through January 31, 2016, it will permit borrowings up to $1,500 in excess of the borrowing base calculation set forth in the Loan Agreement. As of December 31, 2015, unused borrowing availability was approximately $5,600 and no amounts were outstanding under the Revolving Loan Agreement.

[8]

Unsecured Note. In March 2015, the Company exchanged the remaining principal amount of $9,149 related to the Senior Secured 6% Notes with an accredited investor for (i) a cash payment of $13,000, (ii) an unsecured note in the principal amount of $1,800 (the "Unsecured Note") and (iii) the issuance of warrants to purchase 8,333,333 shares of the Company's common stock at an exercise price of $0.45 per share (the "Prepaid Warrants") for which the holders prepaid the exercise fee in the aggregate amount of $3,750. During 2015 all of the Prepaid Warrants were exercised. The Unsecured Note is due March 1, 2016 and bears interest at a rate of 0.40% per annum. The principal amount of the Unsecured Note is payable in twelve equal monthly installments of $150 on the first business day of each month from April 2015 through March 2016.

[9]

Vapestick Credit Facility. The Company had a credit facility (the "Vapestick Credit Facility") with a bank in the United Kingdom. The Vapestick Credit Facility provided for up to $310 of borrowings collateralized by trade receivables. The Vapestick Credit Facility also provided for up to $310 of borrowings collateralized by inventories. The weighted average interest rate was 5.4% as of December 31, 2014, and this credit facility expired during the fourth quarter of 2015 and was not renewed.

[10]

Demand Notes and Mortgage Payable. Demand Notes were exchanged for convertible promissory notes in February 2015. The Mortgage Payable was repaid in the second quarter of 2015 from proceeds received from the sale of the Company"s land and office building in Michigan.