U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended JuneSeptember 30, 2015

Commission File No. 000-52438

Cirque Energy, Inc.

(Exact name of small business issuer as specified in its charter)

414 West Wackerly Street, Midland, MI 48640-4701

(Address of Principal Executive Offices)

PO Box 214981, Auburn Hills, MI 48321-4981

(Mailing Address)

989-266-9100

(Issuer’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ] No [X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ] No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

There were 343,180,157342,719,443 shares of common stock outstanding as of December 18, 2015.January 6, 2016.

Documents incorporated by reference: None

TABLE OF CONTENTS

FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date this Form 10-Q is filed, and we do not intend to update any of the forward-looking statements after the date this Quarterly Report on Form 10-Q is filed to confirm these statements to actual results, unless required by law.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Cirque Energy, Inc.

CondensedConsolidated Balance Sheets

The accompanying notes are an integral part of these consolidated financial statements.

Cirque Energy, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

Cirque Energy, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

Notes to Financial Statements

Note 1 – Nature of Operations

The Company was incorporated in Florida on July 16, 1998 under the name of Salty’s Warehouse, Inc. and was engaged in selling name brand consumer products over the Internet. The Company focused on selling consumer electronics and audio-video equipment such as speakers, amplifiers, and tuners, though the Company also sold assorted other goods such as watches, sunglasses and sports games. On December 11, 2006, owners of an aggregate of 22,450,000 shares of common stock of Salty’s Warehouse, Inc. sold all of the shares held by them to a group of approximately 54 purchasers in a private transaction. As a result of this transaction, a change of control in the Company occurred resulting in a change in the name of the Company to E World Interactive, Inc. (the “Company” or “E World”). At that time, E World was principally engaged in the selling of online game services and media production business in mainland China.

Having operated in this sector for some time, the Company then disposed of its subsidiaries Shanghai E World China Information Technologies Co., Ltd (“E World China”) and Mojo Media Works Limited in August 2008, and following this ceased all business in online game and media production business and became a shell company.

In March of 2009, the Company entered into a stock purchase agreement with Blue Atelier, Inc. (“Blue Atelier”) whereby Blue Atelier acquired 25,000,000 newly authorized and issued common stock of E World after E World executed a 1 for 40 reverse split of the issued and outstanding common stock and also entered into a series of agreements with various holders of Convertible Notes to convert these notes plus accumulated interest to E World Common Stock in the aggregate to 6,872,830 shares of common stock. As a result of this transaction, a change of control in the Company occurred in E World with Blue Atelier then owning 75% of the outstanding common stock of E World.

In May 2010, the Company acquired 100% of the outstanding common stock of Media and Technology Solutions, Inc. (“MTS”), a Nevada corporation with a variety of media and related interests and rights and emerged from shell status. The consideration for the purchase of MTS was 10,000,000 shares of E World common stock. Blue Atelier, the principal shareholder of MTS, was also the largest shareholder in E World. Following this acquisition, E World moved its principal office to Las Vegas, Nevada. The acquisition of MTS was accounted for in a manner similar to a pooling of interests in accordance with accounting principles generally accepted in the United States because the entities were under common control.

On September 17, 2011, E World entered into a letter of intent with Green Renewable Energy Solutions, Inc. (“GRES”), the purpose of which was to acquire the assets of GRES which included certain contracts for the acceptance, processing and disposal of construction and demolition waste and as part of this agreement, E World changed its name to Green Energy Renewable Solutions (“GERS”), effective December 12, 2011. On January 26, 2012, GERS completed a 1-for-5 reverse split and on February 4, 2012 E World, including its subsidiary, MTS, was spun out as a separate private company by way of a special share dividend with one E World share issued for every share held on the date of the approval of the reverse split. FINRA approved the name change and the reverse split on January 26, 2012.

On February 4, 2012 GRES executed an asset purchase agreement (the “Purchase Agreement”) with GERS. Under the terms of the Purchase Agreement, GERS acquired all of the assets of GRES for 6,209,334 shares of its common stock and a further 4,604,666 common shares of deferred consideration.

GERS is focused on the acquisition of waste streams and maximizing its value utilizing recycling, renewable energy production, and environmentally responsible disposal strategies. On June 27, 2012, the Company approved a 1-for-1 stock dividend for shares held on June 29, 2012 and the dividend shares were issued following FINRA approval on July 27, 2012.

On April 29, 2013, the Company formed Green Harvest Landfill, LLC as a Delaware limited liability company to be a wholly owned subsidiary for the sole purpose of acquiring the Davison Landfill. An offer was made and accepted by the bankruptcy trustee who was in possession of the Davison Landfill. Subsequently, the transaction did not close and the Green Harvest Landfill, LLC lies dormant.

On May 15, 2013 GERS entered into a contribution agreement with Cirque Energy II, LLC (“Cirque LLC”) whereby Cirque LLC would contribute all of its assets in exchange for common stock in the Company. Included in Cirque LLC’s assets were three subsidiary limited liability companies: The Prototype Company, LLC; Gaylord Power Station, LLC; and Midland Renewable Energy Station, LLC. This contribution agreement has not yet been consummated.

In July 2013, GERS effectuated a name change to Cirque Energy, Inc. (the “Company” or “Cirque”) by amending its articles of incorporation. FINRA approval of the name change and change in trading symbol continues to be pending.

Cirque’s key area of business is focused on the securing of waste streams, including but not limited to: construction, demolition, and municipal solid waste streams and maximizing their values by recycling and waste to energy opportunities.

On November 14, 2013, Cirque and Northrop Grumman Systems Corporation entered into a Joint Development Agreement to continue the technology development of a Deployable Gasification Unit (DGU) and towards this end, to develop a DGU prototype for testing and demonstration. In consideration for Cirque to fund and develop a test unit, Northrop Grumman wished to permit its intellectual property to be used by Cirque and, provided a prototype is a success and the device is deemed viable, a division of responsibilities, obligations and customer sales privileges will be outlined in a mutually drafted and agreed to Business and Marketing Plan that will further define the intent of this Joint Development Agreement.

On March 1, 2015, Cirque changed its head office to 414 West Wackerly Street, Midland, Michigan 48640 from 645 Griswold Street, Suite 3274, Detroit, Michigan 48226.

Note 2 – Condensed Financial Statements

The accompanying consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial positions, results of operations, and cash flows on JuneSeptember 30, 2015, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s December 31, 2014 audited financial statements as reported in its Report on Form 10-K. The results of operations of the sixnine months ended JuneSeptember 30, 2015 are not necessarily indicative of the operating results for the full year ending December 31, 2015.

Note 3 -– Summary of Significant Accounting Policies

Note 4 – Going Concern

Our continuation as a going concern is dependent upon obtaining additional working capital to sustain our current status. As shown in the accompanying financial statements, the Company had an accumulated deficit of $16,194,831$17,512,324 at JuneSeptember 30, 2015. At present, Management does not have any pending, realistic, or even plausible plans to obtain additional financing from any source. The Company is essentially insolvent. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Note 5 – Related Party Transactions

The Company records transactions of commercial substance with related parties at fair value as determined with management. Amounts due to shareholders/related parties are non-interest bearing, unsecured, and due upon demand.

The following is a list of related party balances as of JuneSeptember 30, 2015 and December 31, 2014:

Related party transactions during the period include salary and consultancy fees for the sixnine months ended JuneSeptember 30, 2015 and 2014 as follows:

The Company has recorded $18,943$110,846 and $12,446$85,306 in payroll tax liabilities during the sixnine months ended JuneSeptember 30, 2015 and June 30, 2014, respectively related to payments made to its executives.

As of JuneSeptember 30, 2015, the Company has accrued liabilities to officers and directors for compensation in common stock in the following amounts:

David W. Morgan Employment Agreement

On July 1, 2014, the Company executed an employment agreement with David W. Morgan under which Mr. Morgan agreed to become the Company’s Chief Financial Officer. The agreement expires on July 1, 2016 and provides for Mr. Morgan to receive an annual salary of $150,000. He was also granted options to purchase 1,000,000 shares of the Company’s common stock under this agreement. See Note 9 – Stockholders Equity.

Note 6 – Operating Lease Commitments

On February 1, 2014, the Company entered into a twelve-month lease for office space for its head office at 645 Griswold Street, Suite 3274, Detroit, Michigan 48226. The monthly lease payment was $1,200. The lease expired on February 1, 2015 and the Company vacated the premises.

On March 1, 2015, the Company entered into a twelve-month lease for office space for its head office at 414 W. Wackerly Street, Midland, Michigan 48640. The monthly lease payment is $1,720. The lease expires on March 1, 2016.

Note 7 – Convertible Notes

Asher Enterprises Promissory Note VIII July 10, 2013

On July 10, 2013, the Company issued a Convertible Promissory Note (the “Note”) to Asher Enterprises, Inc. (the “Holder”) in the original principal amount of $32,500 bearing an 8.00% annual interest rate, unsecured and maturing April 8, 2014. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 58% of the market price, which means the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $32,500 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $68,097 and derivative expense of $35,597 based on the Black Scholes Merton pricing model.

On November 7, 2013, this Note was assigned to Matthew Morris by the Holder.

As of April 15, 2014, the Company had failed to file its annual report with the Securities and Exchange Commission thus creating a default according to the terms of the Note. In accordance to the terms of the Note, the default provision requires a penalty of $16,250 to be added to the principal of the Note. This same amount has been expensed as additional interest expense.

As of December 31, 2014, the entire debt discount of $32,500 had been amortized.

On May 5, 2015, Matthew Morris declared an event of default as the Company failed to timely deliver shares upon notice of conversion. The Company and Morris entered into a forbearance agreement on June 21, 2015 under which the Company agreed to add $27,421 to the principal amount of the Note. The Note balance as of JuneSeptember 30, 2015 was $76,171. The amount added to the principal was reflected in Interest Expense on the income statements for the three and sixnine months ended JuneSeptember 30, 2015.

The fair value of the derivative liability at JuneSeptember 30, 2015 was $66,366,$97,103, resulting in a loss on the change in fair value of the derivative of $9,645$40,382 and $29,410$30,737 for the sixnine and three months ended JuneSeptember 30, respectively. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $17,917$24,580 and $12,650, respectively.

JMJ Financial Promissory Note V September 25, 2013

On September 25, 2013, the Company received cash proceeds of $25,000 with an original issue discount of $4,481 on the fifth tranche of the Convertible Note (“Note”) with JMJ Financial. The Company recorded a debt discount in the amount of $29,481 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $47,618 and derivative expense of $22,618 based on the Black Scholes Merton pricing model.

As of April 15, 2014, the Company had failed to file its annual report with the Securities and Exchange Commission thus creating a default according to the terms of the Note. In accordance to the terms of the Note, the default provision requires a penalty of $14,741 to be added to the principal of the Note. This same amount has been expensed as additional interest expense.

As of December 31, 2014, the entire debt discount of $29,481 had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $42,728$98,915 resulting in a gainloss on the change in fair value of the derivative of $34,052$90,669 and a loss on the change in fair value of the derivative of $8,283$47,904 for the sixnine and three months ended JuneSeptember 30, 2015 respectively. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $12,293$14,671 and $7,615, respectively.

JMJ Financial Promissory Note VI December 9, 2013

On December 9, 2013, the Company received cash proceeds of $50,000 with an original issue discount of $8,962 on the sixth tranche of the Convertible Note (“Note”) with JMJ Financial. The Company recorded a debt discount in the amount of $58,962 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $434,130 and derivative expense of $384,130 based on the Black Scholes Merton pricing model.

As of April 15, 2014, the Company had failed to file its annual report with the Securities and Exchange Commission thus creating a default according to the terms of the Note. In accordance to the terms of the Note, the default provision requires a penalty of $29,481 to be added to the principal of the Note. This same amount has been expensed as additional interest expense.

As of December 31, 2014, the entire debt discount of $58,962 had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $85,322$198,557 resulting in a gainloss on the change in fair value of the derivative of $35,046$78,189 and a loss on the change in fair value of the derivative of $16,568$113,235 for the sixthree and threenine months ended JuneSeptember 30, 2015 respectively. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $23,799$28,534 and $14,422, respectively.

LG Capital Funding, LLC Promissory Note IV September 18, 2013

On September 18, 2013, the Company issued a Convertible Promissory Note (the “Note”) to LG Capital Funding, LLC (the “Holder”) in the original principal amount of $26,500 bearing an 8.00% annual interest rate, unsecured and maturing June 27, 2014. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $26,500 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $45,285 and derivative expense of $18,785 based on the Black Scholes Merton pricing model.

As of April 15, 2014, the Company had failed to file its annual report with the Securities and Exchange Commission thus creating a default according to the terms of the Note. In accordance to the terms of the Note, the default provision requires a penalty of $13,250 to be added to the principal of the Note. This same amount has been expensed as additional interest expense.

As of December 31, 2014, the entire debt discount of $26,500 had been amortized. During February, 2015, the Holder converted the entire principal balance of $26,500 and the accrued interest of $5,461 into 4,891,260 shares of the Company’s common stock. The Company recorded a loss on the conversion of $38,761, a gain on the derivative liability of $72,142, and gain on settlement of debt of $0 during the three months and the sixnine months ended JuneSeptember 30, 2015 respectively.

LG Capital Funding, LLC Promissory Note VI November 18, 2013

On November 18, 2013, the Company issued a Convertible Promissory Note (the “Note”) to LG Capital Funding, LLC (the “Holder”) in the original principal amount of $30,000 bearing an 8.00% annual interest rate, unsecured and maturing August 18, 2014. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $30,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $77,099 and derivative expense of $47,099 based on the Black Scholes Merton pricing model.

As of April 15, 2014, the Company had failed to file its annual report with the Securities and Exchange Commission thus creating a default according to the terms of the Note. In accordance to the terms of the Note, the default provision requires a penalty of $15,000 to be added to the principal of the Note. This same amount has been expensed as additional interest expense.

As of December 31, 2014, the entire debt discount of $30,000 had been amortized. On February 15, 2015, the Holder transferred the Note to Kodiak Capital Group. The default penalty was extinguished. The fair value of the derivative liability at JuneSeptember 30, 2015 was $39,801$62,197 resulting in a gain on the change in fair value of the derivative of $42,061$19,670 and a gainloss on the change in fair value of the derivative of $16,120$22,396 for the sixnine and three months ended JuneSeptember 30, 2015 respectively. The Company recorded a gain on settlement of debt of $0 and $15,000 during the three months and sixnine months ended JuneSeptember 30, 2015 respectively. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $15,807$18,907 and $9,708, respectively.

LG Capital Funding, LLC Promissory Note VII November 27, 2013

On November 27, 2013, the Company issued a Convertible Promissory Note (the “Note”) to LG Capital Funding, LLC (the “Holder”) in the original principal amount of $26,500 bearing an 8.00% annual interest rate, unsecured and maturing August 27, 2014. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $26,500 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $214,287 and derivative expense of $187,787 based on the Black Scholes Merton pricing model.

As of April 15, 2014, the Company had failed to file its annual report with the Securities and Exchange Commission thus creating a default according to the terms of the Note. In accordance to the terms of the Note, the default provision requires a penalty of $13,250 to be added to the principal of the Note. This same amount has been expensed as additional interest expense.

As of December 31, 2014, the entire debt discount of $26,500 had been amortized. During March, 2015, the Holder converted the entire principal balance of $26,500 and the accrued interest of $4,130 into 8,751,423 shares of the Company’s common stock. The fair value of the derivative liability at JuneSeptember 30, 2015 was $0. The Company recorded a loss on the conversion of $0 and $43,161, a gain on the derivative liability of $0 and $72,462, and gain on settlement of debt of $0 and $13,250 during the three and sixnine months ended JuneSeptember 30, 2015,2015.

The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $0 and $3,481, respectively.

LG Capital Funding, LLC Promissory Note IX January 6, 2014

On January 6, 2014, the Company issued a Convertible Promissory Note (the “Note”) to LG Capital Funding, LLC (the “Holder”) in the original principal amount of $52,000 bearing an 8.00% annual interest rate, unsecured and maturing September 30, 2014. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $52,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $98,265 and derivative expense of $46,265 based on the Black Scholes Merton pricing model.

As of April 15, 2014, the Company had failed to file its annual report with the Securities and Exchange Commission thus creating a default according to the terms of the Note. In accordance to the terms of the Note, the default provision requires a penalty of $26,000 to be added to the principal of the Note. This same amount has been expensed as additional interest expense.

As of December 31, 2014, the entire debt discount of $52,000 had been amortized. The fair value of the derivative liability at December 31, 2015 is2014 was $55,921. On February 15, 2015, the Holder transferred the Note to Kodiak Capital Group. The default penalty was extinguished. The Company recorded a gain on settlement of debt of $0 and $26,000 during the three and sixnine months ended JuneSeptember 30, 2015 respectively. The fair value of the derivative liability at JuneSeptember 30, 2015 was $68,988$107,808 resulting in a gain on the change in fair value of the derivative of $73,201$34,381 and a loss on the change in fair value of the derivative of $13,067$38,820 for the sixnine and three months ended JuneSeptember 30, 2015 respectively. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $19,318$23,119 and $11,480,$11,840, respectively.

Matthew Morris Promissory Note I November 8, 2013

On November 8, 2013, the Company issued a Convertible Promissory Note (the “Note”) to Mr. Morris (the “Holder”) in the original principal amount of $46,500 bearing an 8.00% annual interest rate, unsecured and maturing August 8, 2014. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price, which means average trading price during the three trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $46,500 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $62,721 and derivative expense of $16,221 based on the Black Scholes Merton pricing model.

On May 5, 2015, Matthew Morris declared an event of default as the Company failed to timely deliver shares upon notice of conversion. The Company and Morris entered into a forbearance agreement on June 21, 2015 under which the Company agreed to add $62,484 to the principal amount of the Note. On April 9, 2015, the Holder converted $12,600 of principal into 5,000,000 shares of the Company’s common stock. On June 23, 2015, the Holder converted $32,730 of principal into 13,000,000 shares of the Company’s common stock. On July 6, 2015, the Holder converted $24,480 of principal into 12,000,000 shares of the Company’s common stock. The Company recorded a loss on these conversions of $51,120 and $148,750 for the conversion of $97,630.three and nine months ended September 30, 2015. The Note balance as of JuneSeptember 30, 2015 was $64,014.$39,534. The amount added to the principal was reflected in Interest Expense on the income statements for the three and sixnine months ended JuneSeptember 30, 2015.

As of December 31, 2014, the entire debt discount of $46,500 had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $53,270$58,994 resulting in a loss on the change in fair value of the derivative of $8,143$13,867 and a loss on the change in fair value of the derivative of $6,621$5,724 for the sixnine and three months ended JuneSeptember 30, 2015 respectively. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $14,286$18,943 and $4,260, respectively.

GEL Properties, LLC Promissory Note II January 21, 2014

On January 21, 2014, the Company issued a Convertible Promissory Note (the “Note”) to LG Capital Funding, LLC (the “Holder”) in the original principal amount of $65,000 bearing a 6.00% annual interest rate, unsecured and maturing January 21, 2015. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 65% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $65,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $86,035 and derivative expense of $21,035 based on the Black Scholes Merton pricing model.

As of December 31, 2014, the entire debt discount of $65,000 had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $2,190 resulting in a gain on the change in fair value of the derivative of $36,693 and a gain on the change in fair value of the derivative of $24,694 for the six and three months ended JuneSeptember 30, 2015 respectively. During February and March, 2015, Holder converted $24,562 in principal into 5,000,000 shares of the Company’s common stock. During the three months ended JuneSeptember 30, 2015, Holder converted $34,521 in principal and $4,797 in accrued interest into 1,824,320 shares of the Company’s common stock. The Company recorded a loss on conversion of 29,442 and $47,878 for the three and six months ended JuneSeptember 30, 2015, respectively. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $15,034$16,190 and $14,745, respectively, while principal of $2.667$2,667 and $65,000 is reflected in Convertible Notes on the balance sheet as of JuneSeptember 30, 2015 and December 31, 2014, respectively.

Typenex Co-Investment, LLC Promissory Note I February 13, 2014

On February 13, 2014, the Company issued a Convertible Promissory Note (the “Note”) to Typenex Co-Investment, LLC (the “Holder”) in the initial principal amount of $150,000 bearing a 10.00% annual interest rate, unsecured and maturing May 13, 2015. The Holder has committed to accept and pay for additional Convertible Promissory Notes in $50,000 tranches up to a total investment of $550,000. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a fixed conversion price of $0.025 per share subject to a reduction if the Company share price falls below the conversion price. The Holder received a warrant to purchase shares of the Company exercisable for a period of 5 years from the closing. The number of warrants will be calculated at 30% of the maturity amount of the tranche’s exercised by the Company.

As of JuneSeptember 30, 2015, the Company had issued 1,500,000 warrants in accordance with the terms of this Note. The exercise price of the warrant is $0.025 per share. The Company recorded a debt discount in the amount of $112,688 for the Note and $51,484 for the warrants in connection with the initial valuation of the derivative liability of the Note and warrants to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $51,484 for the warrants at inception, a derivative liability of $112,688 for the conversion at inception, and derivative expense of $23,770 based on the Black Scholes Merton pricing model.

As of April 15, 2014, the Company had failed to file its annual report with the Securities and Exchange Commission thus creating a default according to the terms of the Note. In accordance to the terms of the Note, the default provision requires a penalty of $83,750 to be added to the principal of the Note. This same amount was expensed in the year ended December 31, 2014 as additional interest expense.

On September 19, 2014, the Company borrowed an additional $25,000 under this Note.

On November 19, 2014, the Company and the Holder entered into a forbearance agreement under which the Holder agreed to forebear from exercising any of its rights under the default provisions of the Note. In exchange, the Note principal was adjusted to $337,500 and the interest rate was set at 10.00% per annum.

As of JuneSeptember 30, 2015, the entire debt discount for the Note and warrants had been amortized. The fair value of the derivative liability of the Note and the warrants at JuneSeptember 30, 2015 was $0$21,703 and $4,637,$10,115, respectively, resulting in a gain on the change in fair value of the derivative liability on the Note of $54,785$33,172 and $26 ona loss of $19,933 for the Note and a gain on the change in fair value of the derivative liability of $18,255$11,388 and $1,953a loss of $9,673 on the warrants for the sixnine months and three months ended JuneSeptember 30, 2015. The Note and warrants are shown net of a debt discount of $0$31,818 at JuneSeptember 30, 2015. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $6,591$14,253 and $3,872, respectively. On March 17, 2015, Holder converted $10,365 of the outstanding principal and $11,535 of the accrued interest into 5,000, 0005,000,000 shares of the Company’s common stock. The Company recorded a loss on the conversion of $13,600 for the sixnine months ended JuneSeptember 30, 2015. On April 13, 2015, Holder converted $13,812 of principleprincipal and $2,188 of the accrued interest into 5,000,000 shares of the Company’s common stock. The Company recognized a loss on the conversion of $19,000 for the three and sixnine months ended JuneSeptember 30, 2015. On June 30, 2015, the Holder converted $24,800 of principal into 10,000,000 shares of the Company’s common stock. The Company recognized a loss of the conversion of $45,200 for the three and sixnine months ended JuneSeptember 30, 2015. On JuneJuly 30, 2015, the Holder converted $20,000 in principal into 8,064,516 shares of the Company’ common stock. The Company recognized a loss on conversion of $14,677 for the three and nine months ended September 30, 2015 On September 30, 2015 and December 31, 2014, outstanding principal on the Notes totaled $313,323$268,523 and $337,500, respectively.

Union Capital, LLC Promissory Note I April 2, 2014

On April 2, 2014, the Company issued a Convertible Promissory Note (the “Note”) to Union Capital, LLC (the “Holder”) in the original principal amount of $100,000 bearing a 9.00% annual interest rate, unsecured and maturing April 2, 2015. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 58% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $100,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $148,053 and derivative expense of $48,053 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, the entire debt discount of $100,000 had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 is $43,598$16,599 resulting in a gain on the change in fair value of the derivative of $17,065$118,046 and $91,047$27,000 for the threenine and sixthree months ended JuneSeptember 30, 2015. The principal balance of the Note of $8,248 and $75,794 is shown net of a debt discount of $0 and $25,206 on the balance sheet at September 30, 2015 and December 31, 2014, and of $0 on the balance sheet at June 30, 2015.respectively. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $2,641$1,196 and $15,034,$6,732, respectively. During February and March, 2015, Holder converted $27,000 of the outstanding principal and $2,296 of accrued interest into 7,518,885 shares of the Company’s common stock. During the fiscal quarter ended June 30, 2015, Holder converted $39,752 in principleprincipal and $4,123 of accrued interest into 14,027,936 shares of the Company’s common stock. During the fiscal quarter ended September 30, 2015, the Holder converted $25,000 of principal and $2,815 in accrued interest into 15,279,425 shares of the Company’s common stock. The Company recorded a loss on the conversion of $112,003$166,305 and $72,925$54,302 for the sixnine months and three months ended JuneSeptember 30, 2015 respectively.

Union Capital, LLC Promissory Note III April 2, 2014

On April 2, 2014, the Company issued a Convertible Promissory Note (the “Note”) to Union Capital, LLC (the “Holder”) in the original principal amount of $100,000 bearing a 9.00% annual interest rate, unsecured and maturing April 2, 2015. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 58% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $105,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $155,456 and derivative expense of $50,456 based on the Black Scholes Merton pricing model.

In accordance with the terms of the Note, the Holder partially converted the Note on April 3, 2014 into 1,930,005 shares of common stock for principal of $15,000 as disclosed in Note 8 resulting in a loss on settlement of promissory convertible notes of $12,599. As of JuneSeptember 30, 2015, the entire debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $85,108$222,321 resulting in a loss on the change in fair value of the derivative liability of $12,294$137,213 and for the three months ended JuneSeptember 30, 2015 and a gainloss on the change in fair value of the derivative liability $47,158$90,054 for the sixnine months ended JuneSeptember 30, 2015. The Note is shown net of a debt discount of $22,685 at December 31, 2014 and $0 on the balance sheet at JuneSeptember 30, 2015. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $9,688$11,596 and $6,058, respectively. On February 12, 2015, Holder converted $5,000 of the outstanding principal and $387 of accrued interest into 619,209 shares of the Company’s common stock. On August 14, 2015 the Holder converted $1,000 in principal and $122 in accrued interest into 460,714 shares of the Company’s common stock. The Company recorded a loss on the conversionthese conversions of $5,449$767 and $6,216 for the three months and sixnine months ended JuneSeptember 30, 2015.

Union Capital, LLC Promissory Note II June 30, 2014

On June 30, 2014, the Company issued a Convertible Promissory Note (the “Note”) to Union Capital, LLC (the “Holder”) in the original principal amount of $34,188 bearing a 9.00% annual interest rate, unsecured and maturing JuneSeptember 30, 2015. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 58% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $34,188 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $46,651 and derivative expense of $12,463 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015 the entire debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $44,745$38,165 resulting in a gain on the change in fair value of the derivative liability of $6,580 and a loss on the change in fair value of the derivative liability of $328 and $1,331$13,453 for the three months and sixnine months ended JuneSeptember 30, 2015 respectively. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $3,077$2,166 and $1,551, respectively. On August 5, the Holder converted $15,000 in principal and $1,479 in accrued interest into 7,133,961 shares of the Company’s common stock. The Company recorded a loss on the conversion of $16,337 for the three months and nine months ended September 30, 2015.

Kodiak Capital Group Note July 31, 2014

On July 31, 2014, the Company issued a Convertible Promissory Note (the “Note”) to Kodiak Capital Group, LLC (the “Holder”) in the original principal amount of $52,500 bearing a 15.00% annual interest rate, unsecured and maturing October 31, 2014. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price, which means the lowest trading price during the thirty trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $52,355 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $52,355 based on the Black Scholes Merton pricing model.

The proceeds from this Note were used as follows: $37,500 was used to repay principal on the E World Promissory Note February 2, 2014 and $15,000 was retained by the Holder as a discount.

As of JuneSeptember 30, 2015, the entire debt discount of $52,355 had been amortized. On June 4, 2015, the Holder converted $5,000 in principleprincipal into 2,439,025 shares of the Company’s common stock. The Company recognized a loss on conversion of $5,488 for the three and sixnine months ended JuneSeptember 30, 2015. On June 16, 2015, the Holder converted $10,000 in principleprincipal into 4,878,049 shares of the Company’s common stock. The Company recognized a loss on conversion of $43,658 for the three and sixnine months ended JuneSeptember 30, 2015. On June 19, 2015, the Holder converted $10,000 in principleprincipal into 4,878,049 shares of the Company’s common stock. The Company recognized a loss on conversion of $44,634 for the three and sixnine months ended JuneSeptember 30, 2015. On June 29, 2015, the Holder converted $15,000 in principleprincipal into 4,166,667 shares of the Company’s common stock. The Company recognized a loss on conversion of $104,530 for the three and sixnine months ended JuneSeptember 30, 2015.

The fair value of the derivative liability at JuneSeptember 30, 2015 was $16,892,$40,379, resulting in a gainloss on the change in fair value of the derivative of $39,497$23,487 and $78,969a gain on the change in the fair value of derivative liability of $55,481 for the three and sixnine months ended JuneSeptember 30, 2015 respectively. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $10,565$13,873 and $4,056, respectively.

Blue Atelier Note August 8, 2014

On August 5, 2014, the Company issued a Convertible Promissory Note (the “Note”) to Blue Atelier (the “Holder”) in the original principal amount of $35,000 bearing a 9.00% annual interest rate, unsecured and maturing September 30, 2014. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price, which means the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $34,051 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $34,051 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, the entire debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $47,298,$88,845, resulting in a gainloss of $16,609$24,938 and a loss of $9,705$41,546 on the change in fair value of the derivative liability for the sixnine and three months ended JuneSeptember 30, 2015. The Note is shown net of unamortized debt discount of $9,705 as of December 31, 2014. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $5,738$7,679 and $1,920, respectively.

E World Note August 8, 2014

On August 5, 2014, the Company issued a Convertible Promissory Note (the “Note”) to E World (the “Holder”) in the original principal amount of $15,000 bearing a 9.00% annual interest rate, unsecured and maturing September 15, 2014. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price, which means the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $14,593 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $14,593 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, the entire debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $20,271,$38,076, resulting in a loss on the change in fair value of the derivative liability of $4,161$17,806 and a gainloss of $7,118$10,688 for the three months and sixnine months ended JuneSeptember 30, 2015 The Note is shown net of unamortized debt discount of $4,159 as of December 31, 2014. The balance sheets as of March 31,September 30, 2015 and December 31, 2014 reflect accrued interest of $3,821$4,993 and $1,515, respectively.

O’Donnell 1 Note October 31, 2014

On October 31, 2014, the Company issued a Convertible Promissory Note (the “Note”) to Frank O’Donnell (the “Holder”) in the original principal amount of $5,000 bearing a 6.00% annual interest rate, unsecured and maturing January 31, 2015. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $2,199 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $2,199 based on the Black Scholes Merton pricing model.

As of March 31,September 30, 2015, the entire debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $1,077,$2,610, resulting in a gainloss on the change in fair value of the derivative liability of $250$1,533 and $1,367$166 for the three months and sixnine months ended JuneSeptember 30, 2015. The Note is shown net of unamortized debt discount of $741 as of December 31, 2014. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $199$275 and $50, respectively.

Union Capital, LLC Promissory Note IV June 30, 2014

On December 19, 2014, the Company issued a Convertible Promissory Note (the “Note”) to Union Capital, LLC (the “Holder”) in the original principal amount of $20,000 bearing a 9.00% annual interest rate, unsecured and maturing December 19, 2015. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price, which means the lowest trading price during the thirty trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $20,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $43,533 and derivative expense of $23,533 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, $10,575$15,616 of the debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $29,917$63,606 resulting in a loss of $3,804$33,689 and a gainloss of $13,616$20,073 on the change in fair value of the derivative liability for the three months and sixnine months ended JuneSeptember 30, 2015 respectively. The Note is shown net of a debt discount of $9,425$4,384 and $19,342 at JuneSeptember 30, 2015 and December 31, 2014, respectively. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $952$1,405 and $59, respectively.

O’Donnell 2 December 30, 2014

On December 30, 2014, the Company issued a Convertible Promissory Note (the “Note”) to Frank O’Donnell (the “Holder”) in the original principal amount of $2,000 bearing a 6.00% annual interest rate, unsecured and maturing March 31, 2015. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $923 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $923 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, the entire debt discount had been amortized. The fair value of the derivative liability at March 31,September 30, 2015 was $431,$1,044, resulting in a gainloss on the change in fair value of the derivative liability of $100$613 and $547$66 for the three and sixnine months ended JuneSeptember 30, 2015 respectively. The Note is shown net of unamortized debt discount of $913 as of December 31, 2014. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect accrued interest of $60$90 and $1, respectively.

JMJ 8 March 31, 2015

On March 31, 2015, the Company issued a Convertible Promissory Note (the “Note”) to JMJ Financial (the “Holder”) in the original principal amount of $30,000 bearing a 8.00% annual interest rate, unsecured and maturing JuneSeptember 30, 2015. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 60% of the market price, which means the lowest trading price during the twenty-five trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $30,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $24,234 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, the entire debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $28,139,$63,831, resulting in a loss of $3,905$35,692 and $63,381 on the change in fair value of the derivative liability for the three and sixnine months ended JuneSeptember 30, 2015. The Note is shown net of unamortized debt discount of $30,000 as of March 31, 2015. The balance sheet as of JuneSeptember 30, 2015 reflects accrued interest of $529.$1,063.

Union 5 April 2, 2015

On April 2, 2015, the Company issued a Convertible Promissory Note (the “Note”) to Union Capital LLC (the “Holder”) in the original principal amount of $26,500 bearing a 9.00% annual interest rate, unsecured and maturing April 2, 2016. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $26,500 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $43,229 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, $6,047$12,299 of the debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $43,229,$53,617, The Company recognized Derivative Expense of $16,729 in the nine months ended September 30, 2015 and a loss on fair value of derivative liability of $9,655 and $52,884 for the three and sixnine months ended JuneSeptember 30, 2015. The Note is shown net of unamortized debt discount of $20,453$14,201 as of JuneSeptember 30, 2015. The balance sheet as of JuneSeptember 30, 2015 reflects accrued interest of $582.$1,183.

Union 6 May 20, 2015

On May 20, 2015, the Company issued a Convertible Promissory Note (the “Note”) to Union Capital LLC (the “Holder”) in the original principal amount of $26,500 bearing a 9.00% annual interest rate, unsecured and maturing May 20, 2016. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $26,500 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $43,927 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, $2,969$9,630 of the debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $43,927,$53,617, The Company recognized Derivative Expense of $17,249 for the nine months ended September 30, 2015 and a loss on fair value of derivative liability of $9,690 and $53,617 for the three and sixnine months ended JuneSeptember 30, 2015. The Note is shown net of unamortized debt discount of $23,531$16,870 as of JuneSeptember 30, 2015. The balance sheet as of JuneSeptember 30, 2015 reflects accrued interest of $268.$869.

LG Capital Funding, LLC 10 May 29, 2015

On May 29, 2015, the Company issued a Convertible Promissory Note (the “Note”) to UnionLG Capital Funding, LLC (the “Holder”) in the original principal amount of $29,000 bearing a 8.00% annual interest rate, unsecured and maturing May 29, 2016. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 55% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $29,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $42,919 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, $2,536$9,825 of the debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $29,000,$52,189, The Company recognized Derivative Expense of $13,919 for the nine months ended September 30, 2015 and a loss on fair value of derivative liability of $9,271 and $38,270 for the three and sixnine months ended JuneSeptember 30, 2015. The Note is shown net of unamortized debt discount of $26,464$19,175 as of JuneSeptember 30, 2015. The balance sheet as of JuneSeptember 30, 2015 reflects accrued interest of $203.

$788.

Adar Bays LLC June 19, 2015

On June 19, 2015, the Company issued a Convertible Promissory Note (the “Note”) to Adar Bays LLC (the “Holder”) in the original principal amount of $25,000 bearing a 8.00% annual interest rate, unsecured and maturing June 19, 2016. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 60% of the market price, which means the average of the three lowest closing trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $25,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $33,543 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, $751$7,036 of the debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $33,543$40,809 The Company recognized Derivative Expense of $8,543 for the nine months ended September 30, 2015 and a loss on fair value of derivative liability of $10,878 and $32,266 for the three and sixnine months ended JuneSeptember 30, 2015. The Note is shown net of unamortized debt discount of $24,249$17,964 as of JuneSeptember 30, 2015. The balance sheet as of JuneSeptember 30, 2015 reflects accrued interest of $115.$619.

O’Donnell 4 May 15, 2015

On May 4, 2015, the Company issued a Convertible Promissory Note (the “Note”) to Frank O’Donnell (the “Holder”) in the original principal amount of $32,000 bearing 8.00% annual interest rate, unsecured and maturing June 30, 2015. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 60% of the market price, which means the lowest trading price during the twenty-five trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $32,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $30,027 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, $19,177 of the entire debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $30,027.$67,983. The Note is shown netCompany recognized Derivative Expense of unamortized debt discount$30,027 for the nine months ended September 30, 2015 and a loss on fair value of $11,843 asderivative liability of June$37,956 for the three and nine months ended September 30, 2015. The balance sheet as of JuneSeptember 30, 2015 reflects accrued interest of $403.$1,049.

JMJ 9 June 24, 2015

On June 24, 2015, the Company issued a Convertible Promissory Note (the “Note”) to JMJ Financial (the “Holder”) in the original principal amount of $50,000 bearing an 8.00% annual interest rate, unsecured and maturing June 24, 2016. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 60% of the market price, which means the lowest trading price during the twenty-five trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded legal fees of $5,000 and a debt discount in the amount of $46,927 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $46,927 based on the Black Scholes Merton pricing model.

As of JuneSeptember 30, 2015, $8,108$13,172 of the debt discount had been amortized. The fair value of the derivative liability at JuneSeptember 30, 2015 was $46,927.$112,389. The Company recognized a loss on fair value of derivative liability of $65,462 and a loss on the fair value of derivative liability of $112,389 for the three and nine months ended September 30, 2015. The Note is shown net of unamortized debt discount of $41,892$36,828 as of JuneSeptember 30, 2015. The balance sheet as of JuneSeptember 30 reflects accrued interest of $39.$640.

Union 7 August 27, 2015

On August 27, 2015, the Company issued a Convertible Promissory Note (the “Note”) to Union Capital LLC (the “Holder”) in the original principal amount of $26,500 bearing a 9.00% annual interest rate, unsecured and maturing May 20, 2016. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 50% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $26,500 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $56,748 based on the Black Scholes Merton pricing model.

As of September 30, 2015, $4,152 of the debt discount had been amortized. The fair value of the derivative liability at September 30, 2015 was $56,478, The Company recognized Derivative Expense of $30,248 for the three and nine months ended September 30, 2015. The Note is shown net of unamortized debt discount of $22,348 as of September 30, 2015. The balance sheet as of September 30, 2015 reflects accrued interest of $222.

Adar Bays LLC 2 August 27, 2015

On August 27, 2015, the Company issued a Convertible Promissory Note (the “Note”) to Adar Bays LLC (the “Holder”) in the original principal amount of $25,000 bearing a 8.00% annual interest rate, unsecured and maturing June 19, 2016. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the Holder’s option at a variable conversion price calculated at 60% of the market price, which means the average of the three lowest closing trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date. The Company recorded a debt discount in the amount of $25,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $30,158 based on the Black Scholes Merton pricing model.

As of September 30, 2015, $3,917 of the debt discount had been amortized. The fair value of the derivative liability at September 30, 2015 was $30,158 The Company recognized Derivative Expense of $5,158 for the three and nine months ended September 30, 2015. The Note is shown net of unamortized debt discount of $21,083 as of September 30, 2015. The balance sheet as of September 30, 2015 reflects accrued interest of $619.

Summary

The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 “Derivatives and Hedging; Embedded Derivatives” (“Topic No. 815-15”). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for’ any unrealized change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black Scholes pricing model. Amortization of debt discount amounted to $219,105$262,847 and $98,029$43,742 for the sixnine and three months ended JuneSeptember 30, 2015 respectively as compared to $841,408$735,142 and $223,827$193,734 for the sixnine and three months ended JuneSeptember 30, 2014 respectively. The derivative liability is revalued each reporting period using the Black Scholes model. Convertible debt as of JuneSeptember 30, 2015 and December 31, 2014 was $1,017,996$918,288 and $1,034,502, respectively, and is shown net of debt discount in the amounts of $146,950$154,708 and $152,101, respectively. As of JuneSeptember 30, 2015 and December 31, 2014, the derivative liability was $928,979$1,701,325 and $1,246,748, respectively.

The Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible note and at December 31, 2014:

Stock Price- The Stock Price was based on the average closing price of the Company’s stock as of the Valuation Date. Stock Price was $0.0071$0.0083 at JuneSeptember 30, 2015.

Variable Conversion Prices- The conversion price was based on 50% to 100% of the average closing price of the Company’s common stock for the previous 10 to 30 trading days prior to the conversion date, or $.0040$.0056 at JuneSeptember 30, 2015.

Time to Maturity -The time to maturity was determined based on the length of time between the Valuation Date and the maturity of the debt. Time to maturity was between 36 and 12 months for the outstanding derivatives.

Risk Free Rate- The risk free rate was based on the Treasury Note rate as of the Valuation Dates with a term commensurate with the remaining termof the debt. The risk free rate was .20% at JuneSeptember 30, 2015 based on one year.

Volatility- The volatility was based on the historical volatility of the Company stock. The average volatility was between 159%168% and 234%211% at JuneSeptember 30, 2015.

Note 8 – Notes Payable

Blue Atelier Promissory Note May 20, 2013

On May 20, 2013 the Company received funding pursuant to a promissory note in the amount of $150,000. The promissory note is secured by the break-up fee in the Asset Purchase Agreement and Bid Procedures agreement in relation to the purchase of the Davison Landfill, preferential payment from funding on any lending agreements related to the purchase of the Davison Landfill, and 10,000,000 shares of common stock. The promissory note bears interest at 6% interest, has a loan premium of $75,000 and matures on July 1, 2013.

On December 30, 2013, the $50,000 of cash proceeds received from the issuance of LG Capital Funding, LLC Promissory Note VIII (See Note 7) was used to pay Blue Atelier outstanding principal and interest. At December 31, 2013, $175,500 principal plus accrued interest of $8,332 is outstanding.

On January 21, 2014, the $30,000 of cash proceeds received from the issuance of the GEL Properties, LLC Promissory Note was used to pay Blue Atelier outstanding principal and interest.

On April 2, 2014, the $105,000 of cash proceeds received from the issuance of Union Capital, LLC Promissory Note was used to pay Blue Atelier outstanding principal and interest.

On June 27, 2014, the $53,771 of cash proceeds received from the issuance of Union Capital, LLC Promissory Note was used to pay Blue Atelier outstanding principal

As of JuneSeptember 30, 2015, and December 31, 2014, this note had an outstanding principal balance of $47,000 and accrued interest of $13,657$15,124 and $10,771 respectively.

E World Promissory Note February 2, 2014

On February 2, 2014, the Company issued a Convertible Promissory Note (the “Note”) to E World in the principal amount of $181,662 bearing a 6.00% annual interest rate, unsecured and maturing February 2, 2016. The Note was issued in exchange for an account payable in the same amount. This Note together with any unpaid accrued interest is convertible into shares of common stock of the Company at the holder’s option at a variable conversion price calculated at 60% of the market price, which means the lowest trading price during the ten trading day period ending on the latest complete trading day prior to the conversion date.

On July 31, 2014, the Company issued a note to Kodiak Capital Group, LLC (see Note 6 – Convertible Notes) for $52,500. Of this amount, $37,500 was used to repay principal on the E World Promissory Note February 2, 2014 and a $15,000 convertible note was issued to E World (see Note 6 –Convertible– Convertible Notes) to further reduce the principal on the E World Promissory Note dated February 2, 2014. The principal balance on this note at June 30,2015September 30, 2015 and December 31, 2014 was $130,923.

Blue Atelier April 23, 2014

On April 23, 2014, the Company entered into a Promissory Note (the “Note”) with E World (the “Holder”) in the principal amount of $75,000 bearing a 9.00% annual interest rate, unsecured and maturing May 31, 2014. The Note went into default for non-payment and, per the terms, an additional $37,500 was added to the principal amount and reflected in Interest Expense on the Consolidated Statements of Operations for the year ended December 31, 2014. The balance sheets as of JuneSeptember 30, 2015 and December 31, 2014 reflect outstanding principal of $112,500 and accrued interest of $8,008$9,709 and $4,660, respectively.

E World $71,500

On September 26, 2014, the Company entered into a Promissory Note (the “Note”) with E World (the “Holder”) in the principal amount of $71,500 bearing a 9% annual interest rate, unsecured and maturing November 10, 2014. Additionally, the Note calls for the issuance of a stock dividend equal to the loan amount. $71,250 was outstanding under this Note as of JuneSeptember 30, 2015 and December 31, 2014. The balance sheets as of March 31,September 30, 2015 and December 31, 2014 reflect accrued interest of $4,658$6,274 and $1,478, respectively.

O’Donnell 3

On January 16, 2015, the Company received $3,000 pursuant to a promissory note issued to Frank A. O’Donnell. The note is unsecured and bears interest at 6%. It matured on March 31, 2015 and required the issuance of $3,000 in shares of the Company’s common stock. $3,000 was outstanding under this Note as of JuneSeptember 30, 2015 and the balance sheets as of March 31,September 30, 2015 and December 31, 2014 reflect accrued interest of $81$127 and $0, respectively.

Note 9 – Stockholders’ Equity

The Company is authorized to issue an aggregate of 900,000,000 shares of common stock with a par value of $0.001. The Company is also authorized to issue 20,000,000 shares of “blank check” preferred stock with a par value of $0.001 per share of which 13,420 shares of Class A preferred stock (“Class A”) with a stated value of $10.00 are authorized and 13,420 shares were issued and outstanding at JuneSeptember 30, 2015 and December 31, 2014; 100,000 shares of Class B (“Class B”) preferred stock with a stated value of $10.00 are authorized and 99,997 and 38,193 shares were issued and outstanding at JuneSeptember 30, 2015 and December 31, 2014, respectively; 100,000 shares of Class C (“Class C”) preferred stock with a stated value of $10.00 are authorized and 24,340 were issued and outstanding at JuneSeptember 30, 2015 and December 31, 2014; 100,000 shares of Class D preferred stock (“Class D”) with a stated value of $10.00 are authorized and 12,500 and 0 shares were issued and outstanding at JuneSeptember 30, 2015 and December 31, 2014, respectively.

The preference term of the Class A and Class B is five years with conversion rights to common shares at any time after six months. Each Class A, Class B, and Class C share is convertible into 2,857.14, 690 and 592 shares of common stock, respectively. Each Class A, Class B and Class C share is entitled to 2,857.14, 3,450 and 592 votes, respectively, on any matter that is brought to a vote of the common stockholders. The preference term of the Class D shares is 24 months. Class D shares require a quarterly dividend payment equal to 8% per annum and are convertible into shares of the Company’s common stock at 50% of the average closing price for the ten-day trading period immediately prior to conversion.

Other Stock Issuances

On January 26, 2012, FINRA approved the 5-for-1 reverse stock split of our issued and outstanding common stock. The stock split has been retroactively applied to these financial statements resulting in a decrease in the number of shares of common stock outstanding with a corresponding increase in additional paid-in capital. All share amounts have been retroactively restated to reflect this reverse stock split.

On January 22, 2013, the Company entered into an assignment agreement with E World, an entity under common control, whereby E World agreed to purchase from GERS the Stock Purchase Agreement with Diamond Transport Ltd. for $75,000 payable in three equal monthly cash payments of $25,000, with the last payment due March 22, 2013. As of December 31, 2013, the Company had received $75,000 cash from E World. The Company recorded the cash receipt of $75,000 as additional paid-in capital as of December 31, 2013, due to the related party relationship. The $150,000 stock payable to Diamond Transport Ltd. was reversed and any further liability to Diamond Transport Ltd. was assumed by E World.

On April 22, 2013, the Board of Directors approved the issue of 6,880 Class A Preferred Shares at $10 stated value to Frank A. O’Donnell and 6,540 Class A Preferred Shares at $10 stated value to Joseph L. DuRant for the conversion of debt totaling $134,200. The fair value of the shares issued was $134,200 based on the quoted market price of the shares on the date of approval on an as converted basis.

On January 20, 2014, the Board of Directors approved the issue of 38,194 of Class B Preferred Shares at $10 stated value as described in Note 4.

On April 2, 2014, pursuant to an agreement, the Board of Directors approved the issue of 8,783 of Class C Preferred Shares at $10 stated value to Joseph L. DuRant in exchange for the voluntary surrender of 5,200,000 shares of common stock.

On April 3, 2014, pursuant to an agreement, the Board of Directors approved the issue of 15,557 of Class C Preferred Shares at $10 stated value to Green Renewable Energy Solutions, Inc. in exchange for the voluntary surrender of 9,209,334 shares of common stock. Green Renewable Energy Solutions, Inc. is wholly owned by the Estate of Joseph L. DuRant, president of the Company.DuRant.

On February 13, 2014, pursuant to an agreement, Carmel Advisors LLC was issued 5,000,000 shares of common stock as payment for consulting services to be provided by Carmel Advisors LLC. The services shall include, but are not limited to, the development, implementation and maintenance of an ongoing program to increase the investment community’s awareness of the Company’s activities and to stimulate the investment community’s interest in the Company.

On May 2, 2014, pursuant to an agreement, the Board of Directors approved the issue of 15,000,000 shares of common stock as partial payment for an Equity Purchase Agreement with Kodiak Capital Group, LLC. The final terms of the agreement were met by the Company on October 20, 2014. The Equity Purchase Agreement with Kodiak Capital Group, LLC, provides the Company the right to sell up to $5,000,000 of the Company’s common stock, subject to conditions the Company must satisfy as set forth in the Agreement.

Stock issued during the quarter to date ending June 30, 2014 was valued at the closing market price of the shares on either the date approved by the Board of Directors, the date of settlement, or the date the services have been deemed rendered.

On February 17, 2015, the Company sold 11,000 of its Class D Convertible Shares for $110,000. These shares have a par value of $1 per share, a stated value of $10 per share, and call for the payment of a quarterly dividend at an annual rate of 8.00%. The shares and any accrued and unpaid dividends are convertible by the investors at any time during the first 24 months after investment into shares of the Company’s common stock at 50% of the average closing price of the Company’s common stock during the ten trading days immediately prior to conversion. At its option, the Company may redeem the shares after the 24 month holding period by repaying the initial investment and any unpaid dividends. Such redemption calls for the investors to receive a number of common shares equal to the initial investment divided by the daily average closing price of the Company’s common stock during the ten trading days immediately prior to redemption.

On March 4, 2015, the Company sold 1,000 of its Class D Convertible Shares for $10,000. These shares have a par value of $1 per share, a stated value of $10 per share, and call for the payment of a quarterly dividend at an annual rate of 8.00%. The shares and any accrued and unpaid dividends are convertible by the investors at any time during the first 24 months after investment into shares of the Company’s common stock at 50% of the average closing price of the Company’s common stock during the ten trading days immediately prior to conversion. At its option, the Company may redeem the shares after the 24 month holding period by repaying the initial investment and any unpaid dividends. Such redemption calls for the investors to receive a number of common shares equal to the initial investment divided by the daily average closing price of the Company’s common stock during the ten trading days immediately prior to redemption.

On March 9, 2015, the Company sold 500 of its Class D Convertible Shares for $5,000. These shares have a par value of $1 per share, a stated value of $10 per share, and call for the payment of a quarterly dividend at an annual rate of 8.00%. The shares and any accrued and unpaid dividends are convertible by the investors at any time during the first 24 months after investment into shares of the Company’s common stock at 50% of the average closing price of the Company’s common stock during the ten trading days immediately prior to conversion. At its option, the Company may redeem the shares after the 24 month holding period by repaying the initial investment and any unpaid dividends. Such redemption calls for the investors to receive a number of common shares equal to the initial investment divided by the daily average closing price of the Company’s common stock during the ten trading days immediately prior to redemption.

On May 13, 2015, the Board of Directors approved the issuance of 39,850 shares of Series B Preferred Shares to the following officers and directors:

On June 29, 2015, the Board of Directors approved the issuance of 21,948 shares of Series B Preferred Shares to the following officers and directors:

Stock Issued for Settlement of Convertible Notes Payable

During the sixnine months ended JuneSeptember 30, 2015, the Company issued a total of 107,709,109150,647,725 shares of common stock for debt conversion for an aggregate fair value of $907,247$1,134,347 based on the closing price the date the stock was issued. The difference between the fair value of the shares of common stock issued of $907,247$1,134,347 and the principal and interest converted of $418,834$508,731 is recorded as a loss on settlement of promissory notes and interest of $488,413$625,616 in the consolidated statements of operations.

As of JuneSeptember 30, 2015 and December 31, 2014, the Company had 300,241,514343,180,130 and 192,532,405 shares of common stock issued and outstanding, respectively.

Stock Payable

On August 14, 2012, the Company entered into 6 month professional services agreement, whereby the Company pays the consultant $5,000 cash and $5,000 worth of common stock each month. As of JuneSeptember 30, 2015 and December 31, 2014, the Company has recorded $30,000 in stock payable related to this contract.

On July 1, 2012, the Company entered into a nine month professional services agreement, whereby the Company pays the consultant 250,000 shares of common stock. As of JuneSeptember 30, 2015 and December 31, 2014, the Company has recorded $30,000 in stock payable related to this contract.

On November 1, 2012, the Company entered into a professional services agreement, whereby the Company agreed to pay the consultant $50,000 for services for the Company’s common stock. As of JuneSeptember 30, 2015 and December 31, 2014, the Company has recorded $30,000 in stock payable related to this contract.

On September 20, 2012, the Company entered into an employment agreement whereby the Company agreed to issue 50,000 shares of common stock valued at $6,995 as a commencement bonus. As of JuneSeptember 30, 2015 and December 31, 2014, the Company has recorded $30,000 in stock payable related to this contract.

On April 22, 2013, the Board of Directors approved the issue of 5,714,286 shares of common stock to E World and 1,941,714 shares of common stock to Blue Atelier for settlement of accounts payable totaling $26,796. The fair value of the shares to be issued is $22,968 based on the quoted market price of the shares on the date of approval. The excess of the accounts payable settled over the fair value of the shares issue of $3,828 is recorded as additional paid-in capital due to the related party relationship. As of JuneSeptember 30, 2015 and December 31, 2014, no shares were issued and the $22,968 for this obligation was recorded as stock payable.

On January 10, 2014, the Board of Directors approved the issuance of capital stock as additional compensation for the officers and Board of Director members. The amount of dollars authorized, to whom they are authorized, and the dollar amount of shares each represent is shown in the chart below. As of JuneSeptember 30, 2015, $283,125$360,625 was recorded as stock payable.

On March 12, 2014 two shareholders loaned their shares to the Company in exchange for a note. The note is payable when shares are available and will be paid at a 50% premium. The total shares returned to treasury were 9,500,000 shares and will be repaid with 14,250,000 shares when available and are recorded as stock payable for $213,750. The premium has been expensed as other financing costs. The shares were valued at the fair value on the day of the transaction.

On September 26, 2014, the Company entered into a Promissory Note (the “Note”) with E World (the “Holder”) in the principal amount of $71,500 bearing a 9% annual interest rate, unsecured and maturing November 10, 2014. Additionally, the Note provides for the issuance of common stock having a value equal to the loan amount. $71,250 was outstanding under this Note as of March 31, 2015. $71,500 is reflected in Stock Payable at JuneSeptember 30, 2015 and December 31, 2014. See also Note 7 – Notes Payable. Shares of common stock to be issued under this Note at JuneSeptember 30, 2015 market prices totaled 10,070,422.

On December 18, 2014, the Company received $20,000 in exchange for the issuance of restricted common shares to Typenex. On June 18, 2015 the Company will issue $20,000 in unrestricted shares to Typenex, the number of which will equal $20,000 divided by the closing price of the Company’s stock on June 17, 2015.

On January 16, 2015, the Company received $3,000 pursuant to a promissory note issued to Frank A. O’Donnell. The note is unsecured and bears interest at 6%. It matured on March 31, 2015 and required the issuance of $3,000 in shares of the Company’s common stock. Shares of common stock to be issued under this Note at JuneSeptember 30, 2015 market prices totaled 422,535.

Warrants

On May 13, 2014, the Company issued warrants to Typenex Co-Investment LLC for 1,500,000 shares of the Company’s common stock exercisable at $.05 per share. The warrants expire on February 13, 2019. The warrants were issued in conjunction with an advance on a promissory note issued to that entity. See also Typenex Co-Investment, LLC Promissory Note I February 13, 2014 in Note 6 – Convertible Notes.

Stock Options

On July 1, 2014, the Company issued options to David W. Morgan, the Company’s Chief Financial Officer to purchase 1,000,000 shares of the Company’s common stock at the closing price on July 1, 2014. The closing price on that date was $0.024 per share. 500,000 of the options vest on July 1, 2015 and the remaining 500,000 options vest on July 1, 2016 in accordance with an employment agreement executed on July 1, 2014 between Morgan and the Company. See also Note 4 – Related Party Transactions.

Note 10 – Fair Value Measurements

FASB ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and prescribes disclosures about fair value measurements.

As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability i nin an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level l measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level l primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

The valuation techniques that may be used to measure fair value are as follows:

Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option-pricing models and excess earnings method.

Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost)

The carrying value of the Company’s borrowings is a reasonable estimate of its fair value as borrowings under the Company’s credit facility have variable rates that reflect currently available terms and conditions for similar debt.

The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of JuneSeptember 30, 2015 and December 31, 2014. As required by FASB ASC 820, financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

In addition, the FASB issued, “The Fair Value Option for Financial Assets and Financial Liabilities.” This guidance expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value option for any of its qualifying financial instruments.

Note 11 – Subsequent Events

On May 16, 2013, the Company and Cirque Energy II, LLC announced the entry into a contribution agreement. The Members of the Cirque Energy II, LLC will receive 43,359,487 shares of the Company’s common stock at closing and another 43,359,487 shares of common stock at such time as the stock price reaches $0.50 per share. The agreement has not yet been consummated.

On July 1, 2015, Union Capital, LLC converted $10,000 in principal and $1,114 in accrued interest owing them under the Note dated April 3, 2014 into 3,585,329 shares of the Company’s common stock.

On July 6, 2015, Matt Morris converted $24,480 in principal owing them under the Note dated November 8, 2013 into 12,000,000 shares of the Company’s common stock.

On July 15, 2015, Union Capital, LLC converted $10,000 in principal and $1,152 in accrued interest owing them under the Note dated April 3, 2014 into 4,646,463 shares of the Company’s common stock.

On July 23, 2015, Union Capital, LLC converted $13,248 in principal and $1,552 in accrued interest owing them under the Note dated April 3, 2014 into 7,047,633 shares of the Company’s common stock.

On July 30, 2015, Typenex Co-Investment, LLC converted $20,000 in principal owing them under the Note dated February 2, 2014 into 8,064,516 shares of the Company’s common stock.

On August 4, 2015, Union Capital, LLC converted $15,000 in principal and $1,479 in accrued interest owing them under the Note dated June 27, 2014 into 7,133,961 shares of the Company’s common stock.

On August 13, 2015, Union Capital, LLC converted $1,000 in principal and $122 in accrued interest owing them under the Note dated May 17, 2013 into 460,714 shares of the Company’s common stock.

On August 10, 2015, the Company entered into a forbearance agreement with Matthew Morris regarding the Asher note that he purchased. He had declared an event of default on August 4, 2015 due to the Company’s inability to deliver common shares in response to a conversion notice that he’d delivered on July 16, 2015. Under the terms of the forbearance agreement, he agreed to rescind the default notice and forbear on all remedies available to him. The forbearance agreement expired on September 10, 2015.

On August 27, 2015 the Company issued a convertible note in the amount of $25,000 to Adar Bays, LLC (the Holder). The Note bears interest at 8% per annum, matures on June 9, 2016, and can be converted, at the Holder’s discretion into shares of the Company’s common stock at a price equal to 60% of the average of the three lowest closing bids during the 20 days prior to conversion.

On August 27, 2015 the Company issued a convertible note in the amount of $26,500 to Union Capital (the Holder). The Note bears interest at 9% per annum, matures on August 27, 2016, and can be converted, at the Holder’s discretion into shares of the Company’s common stock at a price equal to 50% of the lowest closing bid during the 10 days prior to conversion.

On December 7, 2015 the Company issued a convertible note in the amount of $20,000 to Odyssey Research and Trading LLC (the Holder). The Note bears interest at 8% per annum, matures on December 7, 2016, and can be converted, at the Holder’s discretion into shares of the Company’s common stock at a price equal to 60% of the average of the three lowest closing bids during the 20 days prior to conversion.

On December 7, 2015 the Company issued a convertible note in the amount of $19,500 to Union Capital LLC (the Holder). The Note bears interest at 9% per annum, matures on December 7, 2017, and can be converted, at the Holder’s discretion into shares of the Company’s common stock at a price equal to 50% of the lowest closing bid during the 10 days prior to conversion.

On December 7, 2015, the Company, Union Capital LLC, and Odyssey Research and Trading, LLC entered into an escrow agreement under which $34,500 of proceeds from the sale of the convertible notes issued on December 7, 2015 and referenced immediately above are being held by an escrow agent for the benefit of and distribution to several key creditors of the Company. These creditors agreed to complete tasks and services associated with the preparation and filing of the Company’s Quarterly Reports to the SEC on Form 10-Q for the three and six month periods ended June 30, 2015 and for the three and nine month periods ended September 30, 2015 in consideration of being paid for said services from the escrowed funds.

On December 31, 2015, the Company and Union Capital LLC entered into an amendment to all then-outstanding Notes issued by the Company to Union Capital, LLC. The amendment calls for the conversion price on all such Notes to be equal to 50% of the lower of the (i) lowest closing bid price, or (ii) lowest trading price (in both cases, with a ceiling of $0.0075 per share) of the common stock of the Company for the 25 prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Background

Cirque Energy, Inc. (“Cirque,” the “Company,” “we,” “us” or “our company”) was originally incorporated in Florida on July 16, 1998 under the name of Salty’s Warehouse, Inc. and was engaged in selling name-brand consumer products over the Internet. The Company focused on selling consumer electronics and audio-video equipment such as speakers, amplifiers, and tuners, though the Company also sold assorted other goods such as watches, sunglasses and sports games. On December 11, 2006, owners of an aggregate of 22,450,000 shares of common stock sold all of them to a group of approximately 54 investors. As a result of this transaction, a change of control in the Company occurred resulting in a change in its name to E World Interactive, Inc. (“E World”). At that time, E World was principally engaged in the sale of online game services and had a media production business in mainland China.

Having operated in this sector for some time, the Company then disposed of its subsidiaries Shanghai E World China Information Technologies Co., Ltd. and Mojo Media Works Ltd. in August 2008, and, following these sales, ceased all activities in the online game and media production businesses and became a shell company.

In March 2009, the Company entered into a stock purchase agreement with Blue Atelier, Inc. Blue Atelier acquired 25,000,000 newly issued common shares of E World after the Company had executed a forty-to-one reverse split of its issued and outstanding common stock and also entered into a series of agreements with various holders of convertible notes to convert its notes payable plus accumulated interest into 6,872,830 shares of E World’s common stock. As a result of this transaction, a change of control in E World occurred with Blue Atelier then owning 75% of the outstanding common stock of E World.

In May 2010, the Company acquired 100% of the outstanding common stock of Media and Technology Solutions, Inc. (“MTS”), a Nevada corporation with a variety of media and related interests and rights and emerged from shell status. The consideration for the purchase of MTS was 10,000,000 shares of E World common stock. Blue Atelier, the principal shareholder of MTS, was also the largest shareholder in E World. Following this acquisition, E World moved its principal office to Las Vegas, Nevada. The acquisition of MTS was accounted for in a manner similar to a pooling of interests in accordance with accounting principles generally accepted in the United States because the entities were under common control.

On September 17, 2011, E World entered into a letter of intent with Green Renewable Energy Solutions, Inc. (“GRES”), the purpose of which was to acquire the assets of GRES which included certain contracts for the acceptance, processing and disposal of construction and demolition waste and as part of this agreement, E World changed its name to Green Energy Renewable Solutions (“GERS”), effective December 12, 2011. On January 26, 2012, GERS completed a 1-for-5 reverse split and on February 4, 2012 E World, including its subsidiary, MTS, was spun out as a separate private company by way of a special share dividend with one E World share issued for every share held on the date of the approval of the reverse split. FINRA approved the name change and the reverse split on January 26, 2012.

On February 4, 2012 GRES executed an asset purchase agreement (the “Purchase Agreement”) with GERS. Under the terms of the Purchase Agreement, GERS acquired all of the assets of GRES for 6,209,334 shares of its common stock and a further 4,604,666 common shares of deferred consideration.

GERS is focused on the acquisition of waste streams and maximizing its value utilizing recycling, renewable energy production, and environmentally responsible disposal strategies. On June 27, 2012, the Company approved a 1-for-1 stock dividend for shares held on June 29, 2012 and the dividend shares were issued following FINRA approval on July 27, 2012.

On April 29, 2013, the Company formed Green Harvest Landfill, LLC as a Delaware limited liability company to be a wholly owned subsidiary for the sole purpose of acquiring the Davison Landfill. An offer was made and accepted by the bankruptcy trustee who was in possession of the Davison Landfill. Subsequently, the transaction did not close and the Green Harvest Landfill, LLC lies dormant.

On May 15, 2013 GERS entered into a contribution agreement with Cirque Energy II, LLC (“Cirque LLC”) whereby Cirque LLC would contribute all of its assets in exchange for common stock in the Company. Included in Cirque LLC’s assets were three subsidiary limited liability companies: The Prototype Company, LLC; Gaylord Power Station, LLC; and Midland Renewable Energy Station, LLC. This contribution agreement has not yet been consummated.

In July 2013, the Company changed its name to Cirque Energy, Inc. FINRA approval of the name change and a change in the Company’s trading symbol are pending.

General

Cirque’s core business components include proprietary deployable gasification unit (“DGU”) technology and the delivery of clean energy generation solutions as an energy services company (“ESCO”).

DGU Business

Clean Energy Generation Solutions as Energy Services Company (“ESCO”)

Delivery of clean energy Combined Heat and Power (“CHP”) projects, to industrial, commercial, and municipalities, universities, schools, hospitals (“MUSH”) market customers as well as local, state, and federal governments.