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<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Warrant</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Price Range</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Per Share</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise Price</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair Value</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>at Date of</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Issuance</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Aggregate</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Intrinsic</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Balance, December 31, 2015</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">30</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 12%; text-align: right"><font style="font-size: 10pt">695,000-9,750,000,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">10,430,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">509,262</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Granted</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Canceled </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="text-align: right"><font style="font-size: 10pt">(-)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Exercised </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">(30</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">0.00024</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">8,382,915</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">(103,969</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Expired</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">(-)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="border-bottom-style: solid; border-bottom-width: 1pt"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">29,250,000-9,750,000,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">29,886,738</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">(405,293</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Balance, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Vested and exercisable, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Unvested, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Options Shares</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise Price Range</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Per Share</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Weighted Average Exercise Price</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Fair Value at Date of Issuance</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Aggregate</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Intrinsic</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Balance, December 31, 2015</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">1,000,003</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="width: 12%; text-align: right"><font style="font-size: 10pt">0.0005-9,750,000,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">2.00</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">2,785,163</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Expired</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">2</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">9,750,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">9,750,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">(506,697</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Balance, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,000,001</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">0.0005-975,000,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">0.005</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,278,466</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Vested and exercisable, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">1,000,001</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="border-bottom-style: solid; border-bottom-width: 1pt"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">0.0005-975,000,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">0.005</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">2,278,466</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
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<td style="vertical-align: bottom; text-align: justify"> </td>
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<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
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<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Unvested, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">StrikeForce Technical Services Corporation
was incorporated in August 2001 under the laws of the State of New Jersey. On September 3, 2004, the Company changed its name to
StrikeForce Technologies, Inc. (the “Company”). On November 15, 2010, the Company was re-domiciled under the laws of
the State of Wyoming. The Company’s operations are based in Edison, New Jersey.</p>
<p style="font: italic 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is a software development and services
company that offers a suite of integrated computer network security products using proprietary technology. The Company initially
conducted operations as an integrator and reseller of computer hardware and telecommunications equipment and services until December
2002. In December 2002, and formally memorialized in September 2003, the Company acquired certain intellectual property rights
and patent pending technology from NetLabs.com, Inc. (“NetLabs”) including the rights to further develop and sell their
principal technology. In addition, certain officers of NetLabs joined our company as officers and directors of the Company. The
Company’s ongoing strategy is developing and marketing its suite of network security products to the corporate, financial,
healthcare, legal, government, technology, insurance, e-commerce and consumer sectors.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Liquidity and Going Concern</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying financial statements have
been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments
in the normal course of business. As reflected in the accompanying financial statements, for the six months ended June 30, 2016,
the Company incurred a loss from operations of $989,724 and at June 30, 2016, the Company had a stockholders’ deficit of
$7,565,507. These factors raise substantial doubt about the Company’s ability to continue as a going concern. In addition,
the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2015 financial
statements, has raised substantial doubt about the Company’s ability to continue as a going concern. The financial statements
do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At June 30, 2016, the Company had cash on
hand in the amount of $1,667,607. The Company’s ability to continue as a going concern is dependent upon its ability to
implement its business plan. Currently, management is attempting to increase revenues and improve gross margins by a revised sales
strategy. The Company is redirecting its sales focus from direct sales to domestic and international sales channels, where it
is primarily selling through a channel of Distributors, Value Added Resellers, Strategic Partners and Original Equipment Manufacturers.
While the Company believes in the viability of its strategy to increase revenues, there can be no assurances to that effect. The
Company’s ability to continue as a going concern is dependent upon its ability to continually increase its customer base
and realize increased revenues from recently signed contracts. No assurance can be given that any future financing, if needed,
will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able
to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing,
or cause substantial dilution for its stock holders, in the case of equity financing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Basis of Presentation<font style="background-color: white">-</font>Unaudited
Interim Financial Information</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”)
for interim financial information and with the rules and regulations of the United States Securities and Exchange Commission to
Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S.
GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods
have been included. The results of operations for the six months ended June 30, 2016 are not necessarily indicative of the results
of operations to be expected for the full fiscal year ending December 31, 2016. These financial statements should be read in conjunction
with the financial statements of the Company for the year ended December 31, 2015 and notes thereto contained in the Annual Report
on Form 10-K of the Company as filed with the United States Securities and Exchange Commission (“SEC”) on April 14,
2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Reverse Stock Splits </u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2015, the Company effected a 1:650
reverse stock split of the Company's issued and outstanding shares of common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2015, the Company effected a 1:1,000
reverse stock split of the Company's issued and outstanding shares of common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="background-color: white"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="background-color: white">All share
and per share amounts have been adjusted, on a retroactive basis, to reflect the reverse stock splits adopted by the Company as
if the reverses had occurred at the beginning of the earliest period presented.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Estimates</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in
conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Significant estimates include those related to accounting
for potential liabilities and the assumptions made in valuing stock instruments issued for services and derivative liabilities.
Actual results could differ from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Revenue </u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes revenue when it is realized
or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are
met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to
the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. When the Company recognizes
revenue, no provisions are made for returns because, historically, there have been very few sales returns and adjustments that
have impacted the ultimate collection of revenues.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue from hardware sales is recognized when
the product is shipped to the customer and there are either no unfulfilled obligations by the Company, or any obligations that
will not affect the customer's final acceptance of the arrangement. All costs of these obligations are accrued when the corresponding
revenue is recognized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue from time and service contracts is
recognized as the services are provided. Revenue from delivered elements of one-time charge licensed software is recognized at
the inception of the license term, provided we have vendor-specific objective evidence of the fair value of each delivered element.
Revenue is deferred for undelivered elements. The Company recognizes revenue from the sale of software licenses when the four criteria
discussed above are met. If the Company determines that collection of a fee is not reasonably assured, it defers the fee and recognizes
revenue at the time collection becomes reasonably assured, which is generally upon receipt of cash.<font style="color: red"> </font>Revenue
from monthly software licenses is recognized on a subscription basis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company offers an Application Service Provider
(ASP) hosted cloud service whereby customer usage transactions are invoiced monthly on a cost per transaction basis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Stock Compensation</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company periodically issues stock options
and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company
accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the
Financial Accounting Standards Board (FASB) whereas the value of the award is measured on the date of grant and recognized as compensation
expense on the straight-line basis over the vesting period. The Company accounts for stock option and warrant grants issued and
vesting to non-employees in accordance with the authoritative guidance of the FASB whereas 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) at the
date at which the necessary performance to earn the equity instruments is complete. Options granted to non-employees are revalued
each reporting period to determine the amount to be recorded as an expense in the respective period. As the options vest, they
are valued on each vesting date and an adjustment is recorded for the difference between the value already recorded and the then
current value on the date of vesting. In certain circumstances where there are no future performance requirements by the non-employee,
option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement
date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of the Company’s stock
option and warrant grants are estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related
to risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation
expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model, and based on actual experience.
The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in
future periods.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Derivative Financial Instruments</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 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. Derivative instrument liabilities are classified in the balance sheet as current or non-current based
on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">To determine the number of authorized but unissued
shares available to satisfy outstanding convertible securities, the Company uses a sequencing method to prioritize its convertible
securities as prescribed by ASC 815-40-35. At each reporting date, the Company reviews its convertible securities to determine
that their classification is appropriate.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Fair Value of Financial Instruments</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Effective January 1, 2008, fair value measurements
are determined by the Company's adoption of authoritative guidance issued by the FASB, with the exception of the application of
the statement to non-recurring, non-financial assets and liabilities as permitted. The adoption of the authoritative guidance did
not have a material impact on the Company's fair value measurements.  Fair value is defined in the authoritative guidance
as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market
for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy
was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1—Quoted prices in active
markets for identical assets or liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2—Inputs, other than the quoted
prices in active markets, are observable either directly or indirectly.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3—Unobservable inputs based
on the Company's assumptions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is required to use of observable
market data if such data is available without undue cost and effort.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of June 30, 2016 and December 31, 2015,
the Company’s balance sheets included the fair value of derivative liabilities of $280,430 and $989,019, respectively, which
were based on Level 2 measurements. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The recorded amounts for accounts receivable,
accounts payable, accrued expenses, convertible notes, and notes payables approximate their fair value due to their short term
nature.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Income (loss) per Share</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Basic income (loss) per share is computed by
dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during
the period. Diluted income (loss) per share reflects the potential dilution, using the treasury stock method that could occur if
securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the income (loss) of the Company. In computing diluted income (loss) per share, the treasury stock
method assumes that outstanding options, warrants, and convertible preferred stock are exercised and the proceeds are used to purchase
common stock at the average market price during the period. Options, warrants, and convertible preferred stock may have a dilutive
effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise
price of the options and warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">The following tables set forth the computation of basic and diluted
earnings (loss) per share:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><b>Three months ended June 30,</b></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><b>2016</b></td>
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><b>2015</b></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><b>Loss per share - Basic</b></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%"><b>Loss for the period</b></td>
<td style="width: 1%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double">$</td>
<td style="width: 13%; border-bottom: black 2.25pt double; text-align: right">(272,254)</td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 2%; border-bottom: black 2.25pt double">$</td>
<td style="width: 10%; border-bottom: black 2.25pt double; text-align: right">(326,876)</td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Basic average common stock outstanding</td>
<td> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center">2,253,698,380</td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right">509,316</td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Net loss per share</td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">-</td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">(0.64)</td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><b>Three months ended June 30,</b></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><b>2016</b></td>
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><b>2015</b></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 68%"><b>Loss per share - Diluted</b></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 12%; text-align: right"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 2%"> </td>
<td style="width: 13%; text-align: right"> </td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td><b>Loss for the period</b></td>
<td> </td>
<td style="border-bottom: Black 1.5pt double">$</td>
<td style="border-bottom: Black 1.5pt double; text-align: right">(272,254)</td>
<td> </td>
<td> </td>
<td style="border-bottom: Black 1.5pt double">$</td>
<td style="border-bottom: Black 1.5pt double; text-align: right">(326,876)</td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Basic average common stock outstanding</td>
<td> </td>
<td> </td>
<td style="text-align: right">2,253,698,380</td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right">509,316</td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Diluted effect of outstanding stock options and warrants </td>
<td> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">-</td>
<td> </td>
<td> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">-</td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Diluted average common stock outstanding</td>
<td> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right">2,253,698,380</td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right">509,316</td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Net loss per share</td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">-</td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">(0.64)</td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><b>Six months ended June 30,</b></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><b>2016</b></td>
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><b>2015</b></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><b>Earnings per share - Basic</b></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%"><b>Income for the period</b></td>
<td style="width: 1%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double">$</td>
<td style="width: 13%; border-bottom: black 2.25pt double; text-align: right">4,623,865</td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 2%; border-bottom: black 2.25pt double">$</td>
<td style="width: 10%; border-bottom: black 2.25pt double; text-align: right">124,424</td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Basic average common stock outstanding</td>
<td> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center">1,404,082,143</td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right">259,215</td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Net earnings per share</td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">-</td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">0.48</td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><b>Six months ended June 30,</b></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><b>2016</b></td>
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><b>2015</b></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 68%"><b>Earnings per share - Diluted</b></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 12%; text-align: right"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 2%"> </td>
<td style="width: 13%; text-align: right"> </td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td><b>Income for the period</b></td>
<td> </td>
<td style="border-bottom: Black 1.5pt double">$</td>
<td style="border-bottom: Black 1.5pt double; text-align: right">4,623,865</td>
<td> </td>
<td> </td>
<td style="border-bottom: Black 1.5pt double">$</td>
<td style="border-bottom: Black 1.5pt double; text-align: right">124,424</td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Basic average common stock outstanding</td>
<td> </td>
<td> </td>
<td style="text-align: right">1,404,082,143</td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right">259,215</td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Diluted effect of outstanding stock options and warrants </td>
<td> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">533,031</td>
<td> </td>
<td> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">350,408</td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Diluted average common stock outstanding</td>
<td> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right">1,404,615,174</td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right">609,623</td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Net earnings per share</td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">-</td>
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">0.20</td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Significant Concentrations</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the interim period ended June 30, 2016,
sales to two customers comprised 48% and 36% of revenues, respectively. For the interim period ended June 30, 2015, sales to two
customers comprised 63% and 17% of revenues, respectively. At June 30, 2016, two customers comprised 79%, and 10% of accounts receivable,
respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><font style="background-color: white"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Recent Accounting Pronouncements</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued Accounting Standards
Update No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will
supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach
for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred
goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing
and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments
and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods
beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016,
including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect
adjustment as of the date of adoption. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company’s
financial statements and disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2014, the FASB issued Accounting
Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which
provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. ASU 2014-15
requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within
one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise
substantial doubt about the entity’s ability to continue as a going concern. ASU 2014-15 is effective for annual periods
ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating
the expected impact that the standard could have on its financial statements and related disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued Accounting
Standards Update No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability
on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting
periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required
for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period
presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating
the impact of ASU 2016-02 on the Company’s financial statements and disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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
consolidated financial statement presentation or disclosures.<b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Convertible notes payable - related parties
consisted of twelve unsecured convertible notes payable: six to the Company's Chief Executive Officer, for $268,000, at a compounded
interest rate of 8% per annum; two to the Company's VP of Technology, for $57,500, interest ranging from prime plus 2% to prime
plus 4% per annum; and four to the spouse of the Company's Chief Technology Officer, for $30,000, at a compounded interest rate
of 8% per annum. All of the notes are convertible at a fixed conversion price of $9,750,000,000 per share, as defined in the agreements,
and have extended due dates of December 31, 2016. The balance of the outstanding convertible notes payable - related parties was
$355,500 and $355,500 as of June 30, 2016 and December 31, 2015, respectively. At June 30, 2016, all convertible notes payable-related
parties are current liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 33.75pt; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At June 30, 2016 and December 31, 2015, accrued
interest due for the convertible notes – related parties was $418,158 and $391,001, respectively, and is included in accrued
interest in the accompanying balance sheets. Interest expense for convertible notes payable – related parties for the interim
periods ended June 30, 2016 and 2015 was $27,157 and $24,880, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Notes payable consisted of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June 30,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>December 31,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2015</b></p></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-decoration: underline; text-align: justify"><font style="font-size: 10pt"><u>Secured</u></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">(a) H. Group Partners, Inc.</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">310,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">(b) Promissory note - factoring </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">35,200</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-decoration: underline; text-align: justify"><font style="font-size: 10pt"><u>Unsecured</u></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">(c) Promissory notes – various parties </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">456,109</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">875,609</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">(d) Promissory notes – StrikeForce Investor Group</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,460,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,475,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Total notes payable </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,916,109</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,695,809</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Discount on secured notes payable</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">(20,027</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Notes payable, net of discount</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,916,109</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,675,782</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Long-term portion</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">(16,324</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">(222,991</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
<tr style="background-color: white">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Promissory notes, current maturities</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,899,785</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,452,791</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: top">
<td style="width: 3%; text-align: justify"><font style="font-size: 10pt">(a)</font></td>
<td style="width: 97%; text-align: justify"><font style="font-size: 10pt">In May 2015, the Company executed a secured promissory note with an unrelated party for $310,000, bearing interest at 10% per annum maturing through March 31, 2018. The note was secured by the Company's intellectual property, accounts, fixtures and property. As an inducement to make the loan, the note holder received 16,667 shares Series B preferred stock at $1.50 per share that are convertible into shares of the Company's common stock at a 30% discount to current market value, as defined. At June 30, 2016, the conversion feature of the Series B preferred stock was excluded from the Company's derivative analysis due to the Company's use of a sequencing method to prioritize its convertible securities. During the interim period ended June 30, 2016, the Company repaid $310,000 secured note principal, $23,611 of accrued interest, and $204,560 of additional interest to the note holder.</font></td></tr>
<tr>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-size: 10pt">(b)</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">In October 2015, the Company entered into a promissory note agreement with a funder whereby the Company has the option to sell certain of its future receipts from accounts receivables to the funder. The Company executed a note for $50,400 with the funder, and the funder had a security interest in all accounts, chattel paper, equipment, general intangibles, instruments and inventory, as defined in the agreement. As December 31, 2015, the balance of the note was $35,200. As of June 30, 2016, the Company had repaid the remaining balance. </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: top">
<td style="width: 3%; text-align: justify"><font style="font-size: 10pt">(c)</font></td>
<td style="width: 97%; text-align: justify"><font style="font-size: 10pt">Notes payable consists of various unsecured promissory notes with interest up to 10% per annum. As of June 30, 2016, notes aggregating $397,500 were in default. Certain of the notes carry default interest rates up to 14% per annum. The Company is currently pursuing settlements with certain of the note holders. As of December 31, 2015, the balance due under these notes was $875,609, including $408,000 due to Cyber Safety, Inc. ("Cyber Safety", see Note 13). During the interim period ended June 30, 2016, the Company issued a non-interest bearing unsecured promissory note for $75,000 to Cyber Safety maturing in January 2017. Additionally, during the interim period ended June 30, 2016, the Company paid off a total of $509,500 of non-interest bearing unsecured notes, including $450,000 paid to Cyber Safety. At June 30, 2016, the balance due under these notes was $456,109, including $33,000 due to Cyber Safety. </font></td></tr>
<tr>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-size: 10pt">(d)</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">Notes payable of various unsecured promissory notes, interest at 10% per annum, originally due in 2011, and currently in default. The Company is currently pursuing extensions on the notes. During the interim period ended June 30, 2016, the Company repaid $15,000 of principal of one of the notes. </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At June 30, 2016 and December 31, 2015, accrued
interest due for the notes was $1,827,389 and $1,731,874, respectively, and is included in accrued interest in the accompanying
balance sheets. Interest expense for notes payable for the interim periods ended June 30, 2016 and 2015 was $98,318 and $95,409,
respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Notes payable- related party consist of eighteen
unsecured notes payable to the Company's Chief Executive Officer ranging in interest rates of 0% per annum to 10% per annum. The
notes have extended due dates of December 31, 2016, with the exception of one note for $19,875 due in January 2017, and all are
shown as current liabilities. The balance of the outstanding notes payable - related party was $742,513 and $742,513 as of June
30, 2016 and December 31, 2015, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At June 30, 2016 and December 31, 2015, accrued
interest due for the notes – related party was $576,616 and $548,653, respectively, and is included in accrued interest
in the accompanying balance sheets. Interest expense for notes payable - related parties for the interim periods ended June 30,
2016 and 2015 was $27,963 and $27,810, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Under authoritative guidance issued by the
FASB, instruments which do not have fixed settlement provisions, are deemed to be derivative instruments. The conversion feature
of certain of the Company's convertible notes payable and liabilities payable in shares (described in Notes 3 and 4 above) did
not have fixed settlement provisions because the ultimate determination of shares to be issued could exceed current available authorized
shares.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with the FASB authoritative guidance,
the conversion feature of the financial instruments was separated from the host contract and recognized as a derivative instrument.
The conversion feature of the financial instruments has been characterized as a derivative liability and was re-measured at the
end of every reporting period with the change in value reported in the statement of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The derivative liability was valued at the
following dates using a probability weighted Black-Scholes-Merton model with the following assumptions:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June 30,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>December 31,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2015</b></p></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Conversion feature:</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-left: 11.25pt; text-align: justify"><font style="font-size: 10pt">Risk-free interest rate</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">0.16</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">%</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">0.16</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">%</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-left: 11.25pt; text-align: justify"><font style="font-size: 10pt">Expected volatility</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">70</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">%</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">100</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">%</font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-left: 11.25pt; text-align: justify"><font style="font-size: 10pt">Expected life (in years)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="text-align: right"><font style="font-size: 10pt">1 year</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="text-align: right"><font style="font-size: 10pt">.25 to 5 years</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-left: 11.25pt; text-align: justify"><font style="font-size: 10pt">Expected dividend yield</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Fair Value:</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-left: 11.25pt; text-align: justify"><font style="font-size: 10pt">Conversion feature</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">280,430</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">989,019</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The risk-free interest rate was based on rates
established by the Federal Reserve Bank. The expected volatility is based on the historical volatility of a group of comparable
public companies. The expected life of the conversion feature of the notes was based on the remaining terms of the related notes.
The expected dividend yield was based on the fact that the Company has not customarily paid dividends to its common stockholders
in the past and does not expect to pay dividends to its common stockholders in the future.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2015, the balance of the derivative
liabilities was $989,019. During the six months ended June 30, 2016, convertible notes and accrued interest totaling $1,087,707
were converted into shares of common stock or paid in cash, and the Company recorded a gain of $635,600 related to the extinguishment
of the corresponding derivative liability. As of June 30, 2016, the Company re-measured the derivative liabilities and determined
the fair value to be $280,430, and for the six months ended June 30, 2016, recorded a gain on the change in fair value of derivatives
of $73,009.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Common Stock</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the six month period ended June 30,
2016, the Company issued an aggregate of 2,260,252,983 shares of its common stock as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font-size-adjust: none; font-stretch: normal">
<tr>
<td style="width: 3%"> </td>
<td style="vertical-align: top; width: 3%; font: 12pt Times New Roman, Times, Serif; text-align: justify"><font style="font: 10pt Symbol">·</font></td>
<td style="vertical-align: top; width: 94%; font: 12pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 10pt">Convertible note holders converted $143,123 of principal, $49,560 of accrued interest and $386,352 of additional interest, or a total of $579,035, into 2,105,237,983 shares of common stock at conversion prices ranging from $0.000058 to $0.0008 per share.</font></td></tr>
<tr>
<td> </td>
<td style="font: 12pt Times New Roman, Times, Serif; text-align: justify"> </td>
<td style="font: 12pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr>
<td> </td>
<td style="vertical-align: top; font: 12pt Times New Roman, Times, Serif; text-align: justify"><font style="font: 10pt Symbol">·</font></td>
<td style="vertical-align: top; font: 12pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 10pt">An investor processed a cashless exercise of 30 warrant shares into 125,000 shares of the Company's common stock. The investor received an additional 154,875,000 shares of the Company's common stock as modification consideration, valued at $185,850, and recorded as the fair value of shares issued for services in general and administrative expenses. </font></td></tr>
<tr>
<td> </td>
<td style="font: 12pt Times New Roman, Times, Serif; text-align: justify"> </td>
<td style="font: 12pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr>
<td> </td>
<td style="vertical-align: top; font: 12pt Times New Roman, Times, Serif; text-align: justify"><font style="font: 10pt Symbol">·</font></td>
<td style="vertical-align: top; font: 12pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 10pt">The Company issued 15,000 shares of common stock for services, valued at $38.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Capital Contribution </u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2016, the Company's officers forgave
an aggregate total of $762,275 of accrued payroll due to them from the Company. The Company recorded the forgiveness of accrued
payroll as a capital contribution.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below summarizes the Company's warrant
activities at June 30, 2016:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Warrant</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Price Range</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Per Share</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise Price</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair Value</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>at Date of</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Issuance</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Aggregate</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Intrinsic</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Balance, December 31, 2015</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">30</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 12%; text-align: right"><font style="font-size: 10pt">695,000-9,750,000,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">10,430,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">509,262</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Granted</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Canceled </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="text-align: right"><font style="font-size: 10pt">(-)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Exercised </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">(30</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">0.00024</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">8,382,915</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">(103,969</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Expired</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">(-)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="border-bottom-style: solid; border-bottom-width: 1pt"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">29,250,000-9,750,000,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">29,886,738</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">(405,293</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Balance, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Vested and exercisable, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Unvested, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2016, the Company executed a settlement
agreement with an investor relating to outstanding warrant agreements issued in conjunction with convertible notes that were repaid
by the Company in January 2016. Per the terms of the settlement, the investor processed a cashless exercise of 30 warrant shares
into 125,000 shares of the Company's common stock, valued at $150, and recorded as financing expense. The investor received an
additional 154,875,000 shares of the Company's common stock as modification consideration, valued at $185,850, and recorded as
general and administrative expense.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2015, the Company awarded options
to purchase 1,000,000 shares of its common stock to an unrelated consultant, exercisable at $0.0005 per share. Fair value of vested
options was $7,917 in the interim period ended June 30, 2016, and included as part of operating expenses on the statement of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below summarizes the Company's 2004
Incentive Plan and 2012 Stock Incentive Plan activities through June 30, 2016:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Options Shares</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise Price Range</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Per Share</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Weighted Average Exercise Price</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Fair Value at Date of Issuance</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Aggregate</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Intrinsic</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Balance, December 31, 2015</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">1,000,003</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="width: 12%; text-align: right"><font style="font-size: 10pt">0.0005-9,750,000,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">2.00</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">2,785,163</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Expired</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">2</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">9,750,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">9,750,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">(506,697</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Balance, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,000,001</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">0.0005-975,000,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">0.005</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,278,466</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Vested and exercisable, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">1,000,001</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="border-bottom-style: solid; border-bottom-width: 1pt"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">0.0005-975,000,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">0.005</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">2,278,466</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Unvested, June 30, 2016</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of June 30, 2016, options to purchase an
aggregate of 1,000,001 shares of common stock were outstanding under the 2004 incentive plan and 2012 Stock Incentive Plan and
there were 5,500,000 shares remaining available for issuance. At June 30, 2016, the intrinsic value of outstanding options was
zero.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table summarizes information
concerning 2004 Incentive plan and 2012 Stock Incentive Plan as of June 30, 2016:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="10" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Options Outstanding</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="10" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Options Exercisable</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="border-bottom: black 1pt solid; padding-left: 33.75pt; text-align: center"><font style="font-size: 10pt"><b>Range of Exercise Prices</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Outstanding</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average Remaining Contractual Life</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(in years)</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt"><b>Weighted Average Exercise Price</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercisable</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average Remaining Contractual Life</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(in years)</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise Price</b></p></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td colspan="2" style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="width: 20%; text-align: right"><font style="font-size: 10pt">975,000,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">1</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">1.00</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">975,000,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">1</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">1.00</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">975,000,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">0.0005</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">1,000,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">1.30</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">0.0005</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">1,000,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">1.30</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">0.0005</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; border-bottom-style: double; border-bottom-width: 2.25pt"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.0005 - 975,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1,000,001</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1.15</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">2.00</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1,000,001</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1.15</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">2.00</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 28, 2013 the Company initiated patent
litigation against an outside party. In March 2015, the case was in full discovery, the pre-trial hearing was held, and the deliberations
were continuing. Mediation took place in May 2015 to discuss a potential settlement, and on January 15, 2016, the parties reached
a settlement in the matter. As part of the settlement, the Company received a payment in January 2016 of $9,750,000 and incurred
fees related to the settlement of $4,187,257.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the six months ended June 30, 2016,
the Company wrote off $233,632 of trade payables, recorded as forgiveness of debt, that were aged over ten years. Additionally,
accrued interest of $71,153 was forgiven and written-off (see Note 3).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2015 the Company entered into a settlement
agreement relating to a lawsuit with a former channel partner for $412,500 which was recorded as other income. In the period ended
June 30, 2015, the Company and the former channel partner amended the settlement agreement and reduced the total settlement to
$305,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the six months ended June 30, 2016 and
2015, the Company recognized net income of $4,623,865 and $124,424, respectively. The Company did not record any provision for
income taxes because the net income for these periods was offset by available net operating losses of approximately $18.9 million
and $18.0 million, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with guidance of FASB Accounting
Standards Codification ("ASC") 740, Income Taxes, the Company evaluates its deferred tax assets to determine if a valuation
allowance is required based on the consideration of all available evidence using a "more likely than not" standard,
with significant weight being given to evidence that can be objectively verified. This assessment considers, among other matters,
the nature, frequency and severity of current and cumulative losses, forecasts of future profitability; the length of statutory
carryover periods for operating losses and tax credit carryovers; and available tax planning alternatives. Our deferred tax assets
are composed primarily of U.S. federal net operating loss carryforwards and temporary differences related to stock based compensation.
Based on available objective evidence, management believes it is more likely than not that these deferred tax assets are not recognizable
and will not be recognizable until its determined that we have sufficient taxable income. We may recognize the tax benefit from
an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such
a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized
upon ultimate settlement. ASC 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes,
accounting in interim periods, and disclosures. As of June 30, 2016, the Company does not have any liabilities for unrecognized
tax uncertainties.</p>
<p style="margin: 0pt; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><i><u>Asset
Sale and Licensing Agreement</u></i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
August 24, 2015, the Company entered into an agreement with Cyber Safety, Inc., a New York corporation ("Cyber Safety")
for Cyber Safety to license, and retain an option to purchase, the patents and Intellectual Property related to the GuardedID®
and MobileTrust® software. In conjunction with the licensing and the option to purchase, Cyber Safety loaned the Company
$408,000 in 2015 and $75,000 in 2016, of which a total of $450,000 has been repaid in 2016 (see Note 5).</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Cyber
Safety has the option to buy our GuardedID® patent for $9,000,000 that expires on September 30, 2020. At June 30, 2016,
the Company does not have an estimate if Cyber Safety will exercise its option to make the purchase. Cyber Safety will also
resell our GuardedID® and MobileTrust® products, for which we will receive a royalty, while we retain an unlimited
license to resell those products.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">As
a condition of the asset purchase agreement, Cyber Safety will license the Malware Suite (as defined in the Asset Purchase Agreement)
up to and until September 30, 2020. Pursuant to this license, Cyber Safety shall pay the Company 15% of the net amount Cyber Safety
receives, as defined, which amount may be increased to 20% under certain conditions for ProtectID®, and is subject to reduction
for commissions and support costs that Cyber Safety will be obligated to pay to the Company.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In
March 2016, Advanced Cyber, a subsidiary of Cyber Safety, agreed to pay the Company $25,000 per month as a license fee in conjunction
with Company's agreements with Cyber Safety. Included in revenue for the three and six months ended June 30, 2016 is $90,000 and
$100,000, respectively, of license revenue from Advanced Cyber. At June 30, 2016, the total license fee receivable due from Advanced
Cyber was $100,000.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><i><u>Legal
Proceedings</u></i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
June 20, 2016, the Company initiated additional patent litigation against three major competitors in the U.S. District Court for
the District of New Jersey in Newark, for infringement of United States Patent No. 8,484,698. This litigation is ongoing.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><i><u>Due
to Factor</u></i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In
March 2007, the Company entered into a sale and subordination agreement with a factoring firm whereby the Company sold its rights
to two invoices, from February 2007 and March 2007, totaling $470,200 to the factor. Upon signing the agreement and providing
the required disclosures, the factor remitted $197,450 to the Company. By December 31, 2007, the two invoice were deemed uncollectible.
In February 2008, the Company agreed to pay the factor a settlement of $75,000 in September 2008, unless both parties mutually
agreed to extend the due date. In September 2008, the Company and the factor reached a verbal agreement to extend the due date
to December 31, 2008. The Company is currently pursuing a further extension. As of June 30, 2016, the balance due to the factor
by the Company was $209,192 including interest.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Subsequent to June 30, 2016, the Company repaid
$45,000 of principal of unsecured notes to two unrelated parties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Subsequent to June 30, 2016, a note holder
in the StrikeForce Investor Group (See Note 5) assigned a delinquent note of $50,000, dated January 22, 2008, and $20,000 of accrued
interest, to an unrelated party. Upon repayment of the assigned note, the balance of the accrued interest will be forgiven by
the new note holder.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP")
for interim financial information and with the rules and regulations of the United States Securities and Exchange Commission to
Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S.
GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods
have been included. The results of operations for the six months ended June 30, 2016 are not necessarily indicative of the results
of operations to be expected for the full fiscal year ending December 31, 2016. These financial statements should be read in conjunction
with the financial statements of the Company for the year ended December 31, 2015 and notes thereto contained in the Annual Report
on Form 10-K of the Company as filed with the United States Securities and Exchange Commission ("SEC") on April 14,
2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2015, the Company effected a 1:650
reverse stock split of the Company's issued and outstanding shares of common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2015, the Company effected a 1:1,000
reverse stock split of the Company's issued and outstanding shares of common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All share and per share amounts have been
adjusted, on a retroactive basis, to reflect the reverse stock splits adopted by the Company as if the reverses had occurred at
the beginning of the earliest period presented.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in
conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Significant estimates include those related to
accounting for potential liabilities and the assumptions made in valuing stock instruments issued for services and derivative
liabilities. Actual results could differ from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes revenue when it is realized
or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are
met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to
the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. When the Company recognizes
revenue, no provisions are made for returns because, historically, there have been very few sales returns and adjustments that
have impacted the ultimate collection of revenues.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue from hardware sales is recognized when
the product is shipped to the customer and there are either no unfulfilled obligations by the Company, or any obligations that
will not affect the customer's final acceptance of the arrangement. All costs of these obligations are accrued when the corresponding
revenue is recognized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue from time and service contracts is
recognized as the services are provided. Revenue from delivered elements of one-time charge licensed software is recognized at
the inception of the license term, provided we have vendor-specific objective evidence of the fair value of each delivered element.
Revenue is deferred for undelivered elements. The Company recognizes revenue from the sale of software licenses when the four criteria
discussed above are met. If the Company determines that collection of a fee is not reasonably assured, it defers the fee and recognizes
revenue at the time collection becomes reasonably assured, which is generally upon receipt of cash. Revenue from monthly software
licenses is recognized on a subscription basis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company offers an Application Service
Provider (ASP) hosted cloud service whereby customer usage transactions are invoiced monthly on a cost per transaction basis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company periodically issues stock options
and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company
accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the
Financial Accounting Standards Board (FASB) whereas the value of the award is measured on the date of grant and recognized as compensation
expense on the straight-line basis over the vesting period. The Company accounts for stock option and warrant grants issued and
vesting to non-employees in accordance with the authoritative guidance of the FASB whereas 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) at the
date at which the necessary performance to earn the equity instruments is complete. Options granted to non-employees are revalued
each reporting period to determine the amount to be recorded as an expense in the respective period. As the options vest, they
are valued on each vesting date and an adjustment is recorded for the difference between the value already recorded and the then
current value on the date of vesting. In certain circumstances where there are no future performance requirements by the non-employee,
option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement
date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of the Company's stock option
and warrant grants are estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to
risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation
expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model, and based on actual experience.
The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in
future periods.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 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. Derivative instrument liabilities are classified in the balance sheet as current or non-current
based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet
date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">To determine the number of authorized but
unissued shares available to satisfy outstanding convertible securities, the Company uses a sequencing method to prioritize its
convertible securities as prescribed by ASC 815-40-35. At each reporting date, the Company reviews its convertible securities
to determine that their classification is appropriate.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Effective January 1, 2008, fair value measurements
are determined by the Company's adoption of authoritative guidance issued by the FASB, with the exception of the application of
the statement to non-recurring, non-financial assets and liabilities as permitted. The adoption of the authoritative guidance did
not have a material impact on the Company's fair value measurements. Fair value is defined in the authoritative guidance as the
price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for
the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was
established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1—Quoted prices in active markets
for identical assets or liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2—Inputs, other than the quoted
prices in active markets, are observable either directly or indirectly.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3—Unobservable inputs based on
the Company's assumptions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is required to use of observable
market data if such data is available without undue cost and effort.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of June 30, 2016 and December 31, 2015,
the Company's balance sheets included the fair value of derivative liabilities of $280,430 and $989,019, respectively, which were
based on Level 2 measurements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The recorded amounts for accounts receivable,
accounts payable, accrued expenses, convertible notes, and notes payables approximate their fair value due to their short term
nature.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Basic income (loss) per share is computed by
dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during
the period. Diluted income (loss) per share reflects the potential dilution, using the treasury stock method that could occur if
securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the income (loss) of the Company. In computing diluted income (loss) per share, the treasury stock
method assumes that outstanding options, warrants, and convertible preferred stock are exercised and the proceeds are used to purchase
common stock at the average market price during the period. Options, warrants, and convertible preferred stock may have a dilutive
effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise
price of the options and warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following tables set forth the computation
of basic and diluted earnings (loss) per share:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="6" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Three months ended June 30,</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2016</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2015</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Loss per share - Basic</b></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Loss for the period</b></font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">(272,254</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">(326,876</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Basic average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">2,253,698,380</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">509,316</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Net loss per share</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">(0.64</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="6" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Three months ended June 30,</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2016</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2015</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Loss per share - Diluted</b></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Loss for the period</b></font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">(272,254</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">(326,876</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Basic average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,253,698,380</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">509,316</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Diluted effect of outstanding stock options and warrants </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Diluted average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">2,253,698,380</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">509,316</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Net loss per share</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">(0.64</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="6" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Six months ended June 30,</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2016</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2015</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Earnings per share - Basic</b></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Income for the period</b></font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">4,623,865</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">124,424</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Basic average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1,404,082,143</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">259,215</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Net earnings per share</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">0.48</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="6" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Six months ended June 30,</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2016</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2015</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Earnings per share - Diluted</b></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Income for the period</b></font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">4,623,865</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">124,424</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Basic average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,404,082,143</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">259,215</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Diluted effect of outstanding stock options and warrants </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">533,031</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">350,408</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Diluted average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1,404,615,174</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">609,623</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Net earnings per share</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">0.20</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the interim period ended June 30, 2016,
sales to two customers comprised 48% and 36% of revenues, respectively. For the interim period ended June 30, 2015, sales to two
customers comprised 63% and 17% of revenues, respectively. At June 30, 2016, two customers comprised 79%, and 10% of accounts
receivable, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued Accounting Standards
Update No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will
supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach
for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred
goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing
and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments
and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods
beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016,
including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect
adjustment as of the date of adoption. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company's financial
statements and disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2014, the FASB issued Accounting
Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides
guidance on determining when and how to disclose going-concern uncertainties in the financial statements. ASU 2014-15 requires
management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the
date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial
doubt about the entity's ability to continue as a going concern. ASU 2014-15 is effective for annual periods ending after December
15, 2016, and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the expected impact
that the standard could have on its financial statements and related disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued Accounting
Standards Update No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability
on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting
periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required
for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period
presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating
the impact of ASU 2016-02 on the Company's financial statements and disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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
consolidated financial statement presentation or disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="6" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Three months ended June 30,</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2016</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2015</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Loss per share - Basic</b></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Loss for the period</b></font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">(272,254</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">(326,876</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Basic average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">2,253,698,380</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">509,316</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Net loss per share</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">(0.64</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="6" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Three months ended June 30,</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2016</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2015</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Loss per share - Diluted</b></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Loss for the period</b></font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">(272,254</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">(326,876</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Basic average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,253,698,380</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">509,316</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Diluted effect of outstanding stock options and warrants </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Diluted average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">2,253,698,380</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">509,316</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Net loss per share</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">(0.64</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="6" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Six months ended June 30,</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2016</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2015</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Earnings per share - Basic</b></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Income for the period</b></font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">4,623,865</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">124,424</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Basic average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1,404,082,143</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">259,215</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Net earnings per share</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">0.48</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="6" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Six months ended June 30,</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2016</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>2015</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Earnings per share - Diluted</b></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt"><b>Income for the period</b></font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">4,623,865</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right"><font style="font-size: 10pt">124,424</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Basic average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,404,082,143</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">259,215</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Diluted effect of outstanding stock options and warrants </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">533,031</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">350,408</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Diluted average common stock outstanding</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1,404,615,174</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">609,623</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Net earnings per share</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">0.20</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June 30,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>December 31,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2015</b></p></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-decoration: underline; text-align: justify"><font style="font-size: 10pt"><u>Secured</u></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">(a) DART </font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">542,588</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">542,588</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-decoration: underline; text-align: justify"><font style="font-size: 10pt"><u>Unsecured </u></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">(b) Convertible notes with fixed conversion features</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">905,512</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">910,512</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">(c) Convertible notes with adjustable conversion features</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">824,861</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Total convertible notes</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,448,100</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,277,961</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Discount on convertible notes </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">(14,266</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Convertible notes</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,448,100</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,263,695</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June 30,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>December 31,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2015</b></p></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-decoration: underline; text-align: justify"><font style="font-size: 10pt"><u>Secured</u></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">(a) H. Group Partners, Inc.</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">310,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">(b) Promissory note - factoring </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">35,200</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-decoration: underline; text-align: justify"><font style="font-size: 10pt"><u>Unsecured</u></font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">(c) Promissory notes – various parties </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">456,109</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">875,609</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">(d) Promissory notes – StrikeForce Investor Group</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,460,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,475,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Total notes payable </font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,916,109</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,695,809</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Discount on secured notes payable</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">(20,027</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Notes payable, net of discount</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,916,109</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,675,782</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Long-term portion</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">(16,324</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">(222,991</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">)</font></td></tr>
<tr style="background-color: white">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Promissory notes, current maturities</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">1,899,785</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font-size: 10pt">2,452,791</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June 30,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>December 31,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2015</b></p></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Conversion feature:</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-left: 11.25pt; text-align: justify"><font style="font-size: 10pt">Risk-free interest rate</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">0.16</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">%</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font-size: 10pt">0.16</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">%</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-left: 11.25pt; text-align: justify"><font style="font-size: 10pt">Expected volatility</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">70</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">%</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">100</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font-size: 10pt">%</font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-left: 11.25pt; text-align: justify"><font style="font-size: 10pt">Expected life (in years)</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="text-align: right"><font style="font-size: 10pt">1 year</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="text-align: right"><font style="font-size: 10pt">.25 to 5 years</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-left: 11.25pt; text-align: justify"><font style="font-size: 10pt">Expected dividend yield</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font-size: 10pt">Fair Value:</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-left: 11.25pt; text-align: justify"><font style="font-size: 10pt">Conversion feature</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">280,430</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">989,019</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="10" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Options Outstanding</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="10" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font-size: 10pt"><b>Options Exercisable</b></font></td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="border-bottom: black 1pt solid; padding-left: 33.75pt; text-align: center"><font style="font-size: 10pt"><b>Range of Exercise Prices</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Outstanding</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average Remaining Contractual Life</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(in years)</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt"><b>Weighted Average Exercise Price</b></font></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercisable</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average Remaining Contractual Life</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(in years)</b></p></td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise Price</b></p></td>
<td style="text-align: justify"> </td></tr>
<tr>
<td colspan="2" style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="width: 20%; text-align: right"><font style="font-size: 10pt">975,000,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">1</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">1.00</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">975,000,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">1</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">1.00</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right"><font style="font-size: 10pt">975,000,000</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">0.0005</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">1,000,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">1.30</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">0.0005</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">1,000,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">1.30</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font-size: 10pt">0.0005</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; border-bottom-style: double; border-bottom-width: 2.25pt"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">0.0005 - 975,000</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1,000,001</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1.15</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">2.00</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1,000,001</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">1.15</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font-size: 10pt">$</font></td>
<td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font-size: 10pt">2.00</font></td>
<td style="vertical-align: bottom; text-align: justify"> </td></tr>
</table>
355500
355500
35200
15000
397500
875609
456109
408000
33000
635600
233632
100000
90000
175338
22711924
175338
2282964907
3
3
154890000
2105237983
125000
34293
26228
5613589
768051
161336
19227
926696
296341
239464
161197
0.0005
9750000000
27157
24880
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Convertible
notes payable consisted of the following:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b></font></p></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December
31,</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2015</b></font></p></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr>
<td style="vertical-align: top; text-decoration: underline; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Secured</u></font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(a)
DART </font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">542,588</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">542,588</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-decoration: underline; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Unsecured
</u></font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(b)
Convertible notes with fixed conversion features</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">905,512</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">910,512</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(c)
Convertible notes with adjustable conversion features</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">824,861</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Total
convertible notes</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,448,100</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,277,961</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Discount
on convertible notes </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(14,266</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Convertible
notes</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,448,100</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,263,695</font></td>
<td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: top">
<td style="width: 3%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(a)</font></td>
<td style="width: 97%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">At June
30, 2016 and December 31, 2015, $542,588 in aggregate principal amount of the DART/Citco Global debentures was issued and
outstanding and are secured through the note holder's claim on the Company's intellectual property. The secured convertible
debentures are in default. Due to the adjustable conversion price feature of the secured convertible debentures, the conversion
feature of the notes were accounted for a derivative liability (see Note 7). DART did not process any conversions in fiscal
2016 or 2015, and the Company has been in contact with the note holder who has indicated that it has no present intention
of exercising its right to convert the debentures into shares of the Company's common stock. In connection with the secured
convertible debentures with DART/Citco Global, we granted DART/Citco Global a secured interest in all of our assets. Under
the terms of the secured debentures, we are restricted in our ability to issue additional securities as long as any portion
of the principal or interest on the secured debentures remains outstanding. During 2016 or 2015, we did not obtain DART/Citco
Global's written consent related to any of our financing agreements. </font></td></tr>
<tr>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(b)</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Convertible notes
payable consisted of thirteen unsecured convertible notes ranging in interest rates of 0% per annum to 18% per annum. The
notes are convertible at a fixed amount into 13 shares of the Company's common stock, at fixed per share amounts ranging from
$1,950,000 to $9,750,000,000 per share, as defined in the agreements. The notes were due in various dates through 2015 and
are all currently in default. The Company is currently pursuing settlements with certain of the holders.</font></td></tr>
<tr>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">At December 31,
2015, the balance of the accrued interest on the unsecured convertible notes with fixed conversion features was $932,272.
During the interim period ended June 30, 2016, interest expense of $40,174 was recorded, and at June 30, 2016, the balance
of accrued interest on unsecured convertible notes with fixed conversion features was $946,273.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
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<td style="width: 3%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(c)</font></td>
<td style="width: 97%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">At December
31, 2015, the balance of the unsecured convertible notes with adjustable conversion features was $824,861. During the interim
period ended June 30, 2016, the Company repaid a total of $681,738 of unsecured convertible notes principal. In addition,
note holders converted an aggregate of $143,123 of unsecured convertible note principal. At June 30, 2016, the balance of
unsecured convertible notes with adjustable conversion features was $0. </font></td></tr>
<tr>
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<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
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<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Notes were convertible
into shares of Common Stock of the Company at the option of the holder at a price per share discount of 40% of the Company's
Common Stock trading market price during a certain time period. The Company determined that the conversion prices of the Notes
were not a fixed amount because they were subject to adjustment based on the occurrence of future offerings or events and
therefore the conversion feature of the notes were accounted for a derivative liability. During the interim period ended June
30, 2016, the payment and conversion of the convertible notes resulted in the Company recording a gain of $635,600 related
to the extinguishment of the corresponding derivative liability (see Note 7).</font></td></tr>
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<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
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<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">At December 31,
2015, the balance of the accrued interest on the unsecured convertible notes with adjustable conversion features was $296,396.
During the interim period ended June 30, 2016, the Company repaid a total of $147,829 of accrued interest, and note holders
converted an aggregate of $49,560 of accrued interest into shares of common stock. During the interim period ended June 30,
2016, interest expense of $13,278 was recorded. Additionally, accrued interest of $71,153 was forgiven and written-off, and
at June 30, 2016, the balance of accrued interest on unsecured convertible notes payable with adjustable conversion features
was $22,962.</font></td></tr>
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<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
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<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During the interim
period ended June 30, 2016, a total of $192,683 principal and accrued interest on unsecured convertible notes with adjustable
conversion features was converted into 1,594,171,735 shares of the Company's common stock at conversion prices ranging from
$0.000058 to $0.0008 per share. In addition, 511,066,248 shares of common stock were issued with a fair value of $386,202
as additional interest to certain note holders. </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">At
June 30, 2016 and December 31, 2015, accrued interest due for all convertible notes was $969,235 and $1,228,668, respectively,
and is included in accrued interest in the accompanying balance sheets. Interest expense for all convertible notes payable for
the interim periods ended June 30, 2016 and 2015 was $53,452 and $104,245, respectively.</font></p>
In May 2015, the Company executed a secured promissory note with an unrelated party for $310,000, bearing interest at 10% per annum maturing through March 31, 2018. The note was secured by the Company's intellectual property, accounts, fixtures and property. As an inducement to make the loan, the note holder received 16,667 shares Series B preferred stock at $1.50 per share that are convertible into shares of the Company's common stock at a 30% discount to current market value, as defined. At June 30, 2016, the conversion feature of the Series B preferred stock was excluded from the Company's derivative analysis due to the Company's use of a sequencing method to prioritize its convertible securities. During the interim period ended June 30, 2016, the Company repaid $310,000 secured note principal, $23,611 of accrued interest, and $204,560 of additional interest to the note holder.
In October 2015, the Company entered into a promissory note agreement with a funder whereby the Company has the option to sell certain of its future receipts from accounts receivables to the funder. The Company executed a note for $50,400 with the funder, and the funder had a security interest in all accounts, chattel paper, equipment, general intangibles, instruments and inventory, as defined in the agreement. As December 31, 2015, the balance of the note was $35,200. As of June 30, 2016, the Company had repaid the remaining balance.
Notes payable consists of various unsecured promissory notes with interest up to 10% per annum. As of June 30, 2016, notes aggregating $397,500 were in default. Certain of the notes carry default interest rates up to 14% per annum. The Company is currently pursuing settlements with certain of the note holders. As of December 31, 2015, the balance due under these notes was $875,609, including $408,000 due to Cyber Safety, Inc. ("Cyber Safety", see Note 13). During the interim period ended June 30, 2016, the Company issued a non-interest bearing unsecured promissory note for $75,000 to Cyber Safety maturing in January 2017. Additionally, during the interim period ended June 30, 2016, the Company paid off a total of $509,500 of non-interest bearing unsecured notes, including $450,000 paid to Cyber Safety. At June 30, 2016, the balance due under these notes was $456,109, including $33,000 due to Cyber Safety.
Notes payable of various unsecured promissory notes, interest at 10% per annum, originally due in 2011, and currently in default. The Company is currently pursuing extensions on the notes. During the interim period ended June 30, 2016, the Company repaid $15,000 of principal of one of the notes.