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&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0"&gt;Litigation&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0"&gt;The Company is a defendant in a suit in the Supreme Court of the
State of New York, County of Nassau, filed by Fairchild Warehouse Associates, LLC, as plaintiff, for recovery of past rental payments
for the Company&amp;#146;s former office space at 25 Fairchild Avenue, Plainview, New York 11803, with money damages requested in
the amount of $ 141,721, which have been accrued for as of June 30, 2013.&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0"&gt;The Company on April 4, 2013, was served with a summons and complaint,
filed with the Supreme Court of the State of New York, County of New York, Levin Consulting Group, LLC, as plaintiff, where the
plaintiff is claiming that additional shares of the Company&amp;#146;s Common Stock are issuable by the Company to plaintiff in connection
with the exercise by plaintiff of a common stock purchase warrant issued by the Company. As of June 30, 2013 the company has not
accrued any amount for this claim as an amount cannot reasonably be determined.&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0"&gt;The Company is in default under a May 30, 2012, Securities Purchase
Agreement entered into with TCA Global Credit Master Fund, LP, providing for the issuance of $275,000 principal amount of senior
secured redeemable and convertible debentures due November 30, 2012.&amp;#160;&amp;#160;&amp;#160; The Company has not received a notice of
default and is currently negotiating a forbearance agreement with the lender. As of June 30, 2013 the Company has accounted&amp;#160;for
the principal and accrued&amp;#160;interest of $283,250.&amp;#160;&amp;#160;However, the Company has not accrued any additional amounts for
this contingency as an amount cannot be reasonably estimated.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>The entire disclosure for commitments and contingencies.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

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