| Equity and Debt Financing Agreements and Fair Value Measurements | 3. Equity and Debt Financing Agreements
and Fair Value Measurements Convertible Note Financings Short-term convertible debt as of March
31, 2017 is as follows (In thousands):
Notes Accrued Interest Total
Convertible notes with accrued interest accounted for as stock settled debt $ 997 $ 41 $ 1,038
Conversion premiums 524 — 524
1,521 41 1,562
Convertible notes with embedded derivatives 4,302 816 5,118
Derivative discounts (767 ) — (767 )
3,535 816 4,351
Original issue discounts and loan fee discounts (172 ) — (172 )
$ 4,884 $ 857 $ 5,741 Dominion Convertible Debt Financings On November 25,
2014, the Company closed a financing transaction by entering into a Securities Purchase Agreement dated November 25, 2014 (the
“Note I SPA”) with Dominion Capital LLC (the “Purchaser”) for an aggregate subscription amount of $4,000,000
(the “Purchase Price”). Pursuant to the Note I SPA, the Company issued a series of 4% Original Issue Discount Senior
Secured Convertible Promissory Notes (collectively, the “Note I”) to the Purchaser. The Purchase Price will be paid
in eight equal monthly payments of $500,000. Each individual Note was issued upon payment and will be amortized beginning six months
after issuance, with amortization payments being 1/24 th On August 14, 2015,
the Company closed a financing transaction by entering into a Securities Purchase Agreement dated August 14, 2015 (the “Note
II SPA”) with Dominion Capital LLC (the “Purchaser”) for an aggregate subscription amount of $2,400,000 (the
“Purchase Price”). Pursuant to the Note II SPA, the Company issued a series of 4% Original Issue Discount Senior Secured
Convertible Promissory Note (collectively, the “Note II”) to the Purchaser. The Purchase Price was paid in six equal
monthly payments of $400,000. Each individual Note was issued upon payment and is amortized beginning six months after issuance,
with amortization payments being 1/24 th The aggregate principal
amount of both Notes I and II are issued with a 4% original issue discount whereby the aggregate principal amount of Notes I and
II is $6,400,000 but the actual purchase price of Notes I and II is $6,144,000. Each of Notes I and II accrue interest at a rate
equal to 12% per annum and with maturity dates, depending on the date funded, between June 26, 2016 and June 30, 2017. Notes I
and II are convertible any time after the issuance date of the notes. The Purchasers have the right to convert Note I into shares
of the Company’s common stock at a conversion price equal to 95% of the daily VWAP on the trading day immediately prior to
the closing of each tranche. The Purchasers have the right to convert Note II into shares of the Company’s common stock at
a conversion price equal to $1.40. Additionally, under certain conditions defined in Notes I and II, the notes would be convertible
into common stock at a price equal to 62.5% of the lowest VWAP during the 15 Trading Days immediately prior to the applicable amortization
date. In the event that there is an Event of Default or certain conditions are not met, the conversion price will be adjusted to
equal to 55% of the lowest VWAP during the thirty (30) Trading Days immediately prior to the applicable Conversion Date. Notes
I and II can be prepaid at any time upon five days’ notice to the Holder by paying an amount in cash equal to the outstanding
principal and interest and a 120% premium. During 2015, the
Company had received all eight tranches under the Note I SPA ($500,000 principal in 2014 and $3,650,000 principal in 2015 which
includes an additional $150,000 added to one of the agreed $500,000 monthly funding as requested by the Company), with maturity
dates, depending on the date funded, between June 26, 2016 and December 29, 2016, pursuant to a convertible note. Under the agreement,
the Company received $3,540,600, which was net of the $448,400 Purchaser’s expenses and legal fees and $166,000 which represents
the 4% original issue discount. As of June 30, 2016, the Company has received, all six tranches under the Note II SPA ($2,281,250
in principal in 2015 and $208,333 in 2016) with maturity dates of February 15, 2017 and June 30, 2017, pursuant to a convertible
note. Under the agreement, the Company received $2,143,000, which was net of Purchaser’s expenses, legal fees of $247,000
and a 4% original issue discount of $99,583. The notes might be accelerated if an event of default occurs under the terms of the
note, including the Company’s failure to pay principal and interest when due, certain bankruptcy events or if the Company
is delinquent in its SEC filings. In connection with the issuance of Notes I and II, the Company recorded a debt discount of $387,000
in 2014, $5,116,600 in 2015 and $180,000 in 2016, totaling to $5,683,600 of debt discount recorded, related to the embedded conversion
option derivative liability. The amortization expense related to that discount recorded during the three months ended March 31,
2017 was approximately $120,000. During the three months ended March 31, 2017, $141,920 of the outstanding principal and interest
on Notes I and II was converted into 900,022,400 shares of common stock. As of March 31, 2017, the outstanding principal and interest
on Notes I and II were $1,987,112. As the note conversion includes a “lesser of” pricing provision, a derivative liability
of $8,936,405 was recorded when Notes I and II were entered into. The derivative liability is re-measured at each balance sheet
date and reclassified to equity on a pro-rata basis upon conversion of the note, the derivative liability balance for Notes I and
II at March 31, 2017 was $2,004,794. On December 22,
2015, in order to finance the acquisition of ENG, the Company closed a financing transaction by entering into a Securities Purchase
Agreement dated December 22, 2015 (the “Note III SPA”) for an aggregate principal amount of $904,042 and subscription
amount of $865,000, net of OID (the “Purchase Price”). The Company also reimbursed the Purchaser $30,000 for legal
fees and expenses from the proceeds of the Note. Pursuant to the Note III SPA, the Company shall issue a 4% Original Issue Discount
Senior Secured Convertible Promissory Note (the “Note III”) to Dominion. Note III was issued upon payment and will
be amortized beginning six months after issuance, with amortization payments being 1/24th of the principal and accrued interest,
made in cash or common stock, on a semi-monthly basis, subject to certain conditions contained in the Note III SPA. The amortization
payments will begin to be due starting on the 15th day of the month immediately following the six-month anniversary of the Closing
Date. The Company received funding for Note III on December 24, 2015, net proceeds of $751,500 (net of the $152,542 of legal fees,
expenses and OID). Note III accrues interest at a rate equal to 12% per annum (interest is guaranteed for the first twelve months)
and has a maturity date of June 15, 2017. Note III is convertible any time after its issuance date and Dominion has the right to
convert any or all of Note III into shares of the Company’s common stock at a conversion price equal to $1.10, subject to
adjustment as described in Note III. Additionally, under certain conditions defined in Note III, it may also be convertible into
common stock at a price equal to 62.5% of the lowest VWAP during the 15 Trading Days immediately prior to the applicable amortization
date. In the event that there is an Event of Default or certain conditions are not met, the conversion price will be adjusted to
equal to 55% of the lowest VWAP during the thirty (30) Trading Days immediately prior to the applicable Conversion Date. Note III
can be prepaid at any time upon five days’ notice to the Dominion by paying an amount in cash equal to the outstanding principal
and interest, and a 20% premium. In connection with the issuance of the Note III, the Company recorded a debt discount of $751,500
when Note III was entered into, related to the embedded conversion option derivative liability. The amortization expense related
to that discount recorded during the three months ended March 31, 2017 was approximately $126,000. As of March 31, 2017, the outstanding
principal and interest on Note III was $1,012,527. As the note conversion includes a “lesser of” pricing provision,
a derivative liability of $1,267,800 was recorded when Note III was entered into. The derivative liability is re-measured at each
balance sheet date, the derivative liability balance for Note III at March 31, 2017 was $606,459. On January 28, 2016,
the Company closed a financing transaction by entering into a Securities Purchase Agreement dated January 28, 2016 (the “Note
IV SPA”) with Dominion Capital LLC (the “Purchaser”) for an aggregate principal amount of $2,187,500 and subscription
amount of $2,100,000 (the “Purchase Price”), net of OID. Pursuant to the Note IV SPA, the Company shall issue a series
of 4% Original Issue Discount Senior Secured Convertible Promissory Notes (collectively, the “Note IV”) to the Purchaser.
The Purchase Price is scheduled to be paid in six equal monthly tranches of $350,000, subject to the discretion of the Purchaser.
Each individual Note will be issued upon payment and will be amortized beginning six months after issuance, with amortization payments
being 1/24th of the principal and accrued interest, made in cash or common stock at the option of the Company, on a semi-monthly
basis, subject to certain conditions and limitations contained in the Note IV SPA. The amortization payments will begin on the
15th day of the month immediately following the six-month anniversary of the Closing Date. The Company also reimbursed the Purchaser
$20,000 for expenses from the proceeds of the first tranche and the Purchaser’s counsel $10,000 from the first tranche. During
the year ended December 31, 2016, the Company has received a total of $604,763 net proceeds under Note IV (net of the $93,153 of
legal fees, expenses and OID). Note IV accrues interest at a rate equal to 12% per annum (interest is guaranteed for the first
twelve months) and has a maturity dates between July 15, 2017 and March 16, 2018. Note IV is convertible any time after its issuance
date and Dominion has the right to convert any or all of Note IV into shares of the Company’s common stock at a conversion
price equal to $1.10 subject to adjustment as described in Note IV. Additionally, under certain conditions defined in Note IV,
it may also be convertible into common stock at a price equal to 62.5% of the lowest VWAP during the 15 Trading Days immediately
prior to the applicable amortization date. In the event that there is an Event of Default or certain conditions are not met, the
conversion price will be adjusted to equal to 55% of the lowest VWAP during the thirty (30) Trading Days immediately prior to the
applicable Conversion Date. Note IV can be prepaid at any time upon five days’ notice to the Dominion by paying an amount
in cash equal to the outstanding principal and interest, and a 20% premium. Subsequent to the funding of the first tranche the
Purchaser and the Company agreed to delay further tranches, until such time as the Purchaser and Company mutually agree, both as
to timing and amount. In connection with the issuances of Note IV, the Company recorded a debt discount of $604,800 when the notes
were entered into, related to the embedded conversion option derivative liability. The amortization expense related to that discount
recorded during the three months ended March 31, 2017 was approximately $118,000. During the three months ended March 31, 2017,
$53,333 of the outstanding principal and interest was converted into 252,000,000 shares of common stock. As of March 31, 2017,
the outstanding principal and interest on Note IV was $707,970. As the note conversion includes a “lesser of” pricing
provision, a derivative liability of $941,800 was recorded when Note IV was entered into. The derivative liability is re-measured
at each balance sheet date, the derivative liability balance for Note IV at March 31, 2016 was $460,188. Pursuant to the
Company’s obligations under Notes I, II, III and IV, the Company entered into a Security Agreement with the Purchaser, pursuant
to which the Company granted a lien on all assets of the Company, subject to existing security interests, (the “Collateral”)
for the benefit of the Purchaser, to secure the Company’s obligations under the Note. In the event of a default as defined
in Notes I, II, III and IV, the Purchaser may, among other things, collect or take possession of the Collateral, proceed with the
foreclosure of the security interest in the Collateral or sell, lease or dispose of the Collateral. Other Convertible Debt Financing On March 9, 2016,
the Company closed a Securities Purchase Agreement (“SPA”) with a lender, providing for the purchase of two Convertible
Redeemable Notes in the aggregate principal amount of $270,400 (the “Notes”), with the first note being in the amount
of $135,200 (“Note I”) and the second note being in the amount of $135,200 (“Note II”) with a maturity
date of March 9, 2017. Pursuant to Note I, the Company received $125,000 of proceeds, net of original issue discount of $5,200
and legal fees of $5,000. Note II was initially paid for by the issuance of an offsetting $130,000 secured note issued by the Lender
to the Company (“Secured Note”). The Notes bear an interest rate of 12%; and may be at any time after 180 days of the
date of closing converted into shares of Company common stock convertible at the lesser of a 37.5% discount to the common stock
price on the date of the note (which was $1.40) or a 37.5% discount to the price of our common stock price at the time of conversion.
The Notes also contain certain representations, warranties, covenants and events of default, and increases in the amount of the
principal and interest rates under the Notes in the event of such defaults. In connection with the issuance of Note I, the Company
recorded a debt discount of $125,000, related to the embedded conversion option derivative liability which was fully amortized
during the year ended December 31, 2016. As of December 31, 2016, the outstanding principal and interest on Note I was fully converted
into 122,903,769 shares of common stock. During the year ended December 31, 2016, the Company received $125,000 pursuant to Note
II, net of original issue discount of $5,200 and legal fees of $5,000. In connection with the issuance of Note II, the Company
recorded a debt discount of $125,000, related to the embedded conversion option derivative liability which was fully amortized
as of December 31, 2016. As of December 31, 2016, $129,980 of the outstanding principal and interest on Note II was converted into
155,053,441 shares of common stock. As of March 31, 2017, Note II had an outstanding balance of $14,213. As the note conversion
includes a “lesser of” pricing provision, a derivative liability of $306,000 was recorded when Notes were entered into.
The derivative liability is re-measured at each balance sheet date and reclassified to equity on a pro-rata basis upon conversion
of the note, the derivative liability balance for Note II at March 31, 2017 was $17,625. On April 1, 2016,
the Company closed a Securities Purchase Agreement (“SPA”) with a lender, providing for the purchase of two Convertible
Redeemable Notes in the aggregate principal amount of $270,400 (the “Notes”), with the first note being in the amount
of $135,200 (“Note I”) and the second note being in the amount of $135,200 (“Note II”). Note I was funded
on April 1, 2016, with a maturity date of April 1, 2017, pursuant to Note I, the Company received $125,000 of net proceeds, net
of original issue discount of $5,200 and legal fees of $5,000. Note II was initially paid for by the issuance of an offsetting
$130,000 secured note issued by the Lender to the Company (“Secured Note”). Note II was funded on August 2, 2016, with
a maturity date of April 1, 2017, pursuant to Note II, the Company received $125,000 of net proceeds, net of original issue discount
of $5,200 and legal fees of $5,000. The Notes bear an interest rate of 12%; and may be at any time after 180 days of the date of
closing converted into shares of Company common stock convertible at the lesser of a 37.5% discount to the common stock price on
the date of the note (which was $1.40) or a 37.5% discount to the price of our common stock price at the time of conversion. In
connection with the issuance of Notes, the Company recorded a debt discount of $250,000, related to the embedded conversion option
derivative liability. The amortization expense related to that discount recorded was approximately $77,000 during the three months
ended March 31, 2017. As of March 31, 2017, the outstanding principal and interest on the Notes were $297,292. As the note conversion
includes a “lesser of” pricing provision, a derivative liability of $311,756 was recorded when Notes were entered into.
The derivative liability is re-measured at each balance sheet date and reclassified to equity on a pro-rata basis upon conversion
of the note, the derivative liability balance for the Notes at March 31, 2017 was $368,642. On April 28, 2016,
the Company closed a Securities Purchase Agreement (“SPA”) with a lender, providing for the purchase of two Convertible
Redeemable Notes in the aggregate principal amount of $437,500 (the “Notes”), with the first note being in the amount
of $218,750 (“Note I”) and the second note being in the amount of $218,750 (“Note II”). Note I was funded
on April 28, 2016, with a maturity date of April 27, 2017, pursuant to Note I, the Company received $190,000 of net proceeds, net
of original issue discount of $8,750 and legal fees of $20,000. Note II was initially paid for by the issuance of an offsetting
$210,000 secured note issued by the Lender to the Company (“Secured Note”). Note II was funded on September 7, 2016,
with a maturity date of April 27, 2017, pursuant to Note II, the Company received $200,000 of net proceeds, net of original issue
discount of $8,750 and legal fees of $10,000.The Notes bear an interest rate of 12%; and may be at any time after 180 days of the
date of closing converted into shares of Company common stock convertible at the lesser of a 37.5% discount to the common stock
price on the date of the note (which was $1.40) or a 37.5% discount to the price of our common stock price at the time of conversion.
In connection with the issuance of the Notes, the Company recorded a debt discount of $390,000, related to the embedded conversion
option derivative liability. The amortization expense related to that discount recorded was approximately $143,000 during the three
months ended March 31, 2017. During the three months ended March 31, 2017, $317,359 of the outstanding principal and interest of
the note was converted into 1,455,878,341 shares of common stock. As of March 31, 2017, the outstanding principal and interest
on the Notes were $132,809. As the note conversion includes a “lesser of” pricing provision, a derivative liability
of $499,800 was recorded when Notes were entered into. The derivative liability is re-measured at each balance sheet date and reclassified
to equity on a pro-rata basis upon conversion of the note, the derivative liability balance for the Notes at March 31, 2017 was
$164,683. On June 3, 2016,
the Company closed a Securities Purchase Agreement (“SPA”) with a lender, providing for the purchase of two Convertible
Redeemable Notes in the aggregate principal amount of $624,000 (the “Notes”), with the first note being in the amount
of $312,000 (“Note I”) and the second note being in the amount of $312,000 (“Note II”). Note I was funded
on June 3, 2016, with a maturity date of June 2, 2017, pursuant to Note I, the Company received $285,000 of net proceeds, net of
original issue discount of $12,000 and legal fees of $15,000. Note II was initially paid for by the issuance of an offsetting $300,000
secured note issued by the Lender to the Company (“Secured Note”). Note II was funded in two tranches during the year
ended December 31, 2016, with a maturity date of June 2, 2017, pursuant to Note II, the Company received $285,000 of net proceeds,
net of original issue discount of $12,000 and legal fees of $15,000. The Notes bear an interest rate of 12%; and may be at any
time after 180 days of the date of closing converted into shares of Company common stock convertible at the lesser of a 35% discount
to the common stock price on the date of the note (which was $1.10) or a 35% discount to the price of our common stock price at
the time of conversion. The Notes also contain certain representations, warranties, covenants and events of default, and increases
in the amount of the principal and interest rates under the Notes in the event of such defaults. In connection with the issuance
of the Notes, the Company recorded a debt discount of $570,000, related to the embedded conversion option derivative liability.
The amortization expense related to that discount recorded was approximately $184,000 for the three months ended March 31, 2017.
During the three months ended March 31, 2017, $204,763 of the outstanding principal and interest of the notes was converted into
694,671,247 shares of common stock. As of March 31, 2017, the outstanding principal and interest on the Notes were $324,746. As
the note conversion includes a “lesser of” pricing provision, a derivative liability of $755,690 was recorded when
Notes was entered into. The derivative liability is re-measured at each balance sheet date and reclassified to equity on a pro-rata
basis upon conversion of the note, the derivative liability balance for the Notes at March 31, 2017 was $210,817. On July 5, 2016,
the Company closed a Securities Purchase Agreement (“SPA”) with a lender, providing for the purchase of two Convertible
Redeemable Notes in the aggregate principal amount of $416,000 (the “Notes”), with the first note being in the amount
of $208,000 (“Note I”) and the second note being in the amount of $208,000 (“Note II”) with a maturity
date of July 30, 2017. Pursuant to Note I, the Company received $190,000 of proceeds, net of original issue discount of $8,000
and legal fees of $10,000. Note II was initially paid for by the issuance of an offsetting $200,000 secured note issued by the
Lender to the Company (“Secured Note”). Pursuant to Note II, the Company received $190,000 of proceeds, net of original
issue discount of $8,000 and legal fees of $10,000 Note II during the three months ended March 31, 2017. The Notes bear an interest
rate of 12%; and may be at any time after 180 days of the date of closing converted into shares of Company common stock convertible
at the lesser of a 37.5% discount to the common stock price on the date of the note (which was $1.10) or a 37.5% discount to the
price of our common stock price at the time of conversion. The Notes also contain certain representations, warranties, covenants
and events of default, and increases in the amount of the principal and interest rates under the Notes in the event of such defaults.
In connection with the issuance of the Notes, the Company recorded a debt discount of $380,000, related to the embedded conversion
option derivative liability. The amortization expense related to that discount recorded was approximately $106,000 for the three
months ended March 31, 2017. As the note conversion includes a “lesser of” pricing provision, a derivative liability
was also recorded in the amount of $386,045. The derivative liability at March 31, 2017 for the Notes was $267,972. As of March
31, 2017, the outstanding principal and interest on the notes was $437,729. On July 6, 2016,
the Company closed a Securities Purchase Agreement (“SPA”) with a lender, providing for the purchase of two Convertible
Redeemable Notes in the aggregate principal amount of $132,300 (the “Notes”), with the first note being in the amount
of $66,150 (“Note I”) and the second note being in the amount of $66,150 (“Note II”) with a maturity date
of July 7, 2017. Pursuant to Note I, the Company received $60,000 of net proceeds, net of original issue discount of $3,150 and
legal fees of $3,000. Note II was initially paid for by the issuance of an offsetting $63,000 secured note issued by the Lender
to the Company (“Secured Note”). The Notes bear an interest rate of 10%; and maybe converted into shares of Company
common stock, convertible at variable conversion price at a 35% discount of the lowest closing bid price of the common stock for
the 15 trading days prior to conversion. The Notes also contain certain representations, warranties, covenants and events of default,
and increases in the amount of the principal and interest rates under the Notes in the event of such defaults. In connection with
the issuance of Note I, the Company recorded a premium of $35,619 as the note is considered stock settled debt under ASC 480, which
was fully accreted as of September 30, 2016. As of March 31, 2017, the outstanding principal and interest on the note was $71,111. On August 1, 2016,
the Company closed a Securities Purchase Agreement (“SPA”) with a lender, providing for the purchase of a Convertible
Redeemable Note with a principal amount of $52,500 (the “Note”) and maturity date of April 29, 2017, pursuant to Note,
the Company received $50,000 of net proceeds, net of original issue discount of $2,500. The Note bears an interest rate of 10%;
and maybe converted into shares of Company common stock, convertible at variable conversion price at a 37.5% discount of the three
lowest closing bid price of the common stock for the 20 trading days prior to conversion. The Note also contain certain representations,
warranties, covenants and events of default, and increases in the amount of the principal and interest rates under the Note in
the event of such defaults. In connection with the issuance of the note, the Company recorded a premium of $31,500 as the note
is considered stock settled debt under ASC 480, which was fully accreted as of September 30, 2016. During the three months ended
March 31, 2017, $6,250 of the outstanding principal and interest of the Note was converted into 25,000,000 shares of common stock.
As of March 31, 2017, the outstanding principal and interest on the note was $50,450. On August 11, 2016,
the Company closed a Securities Purchase Agreement (“SPA”) with a lender, providing for the purchase of a Secured Convertible
Promissory Note in the aggregate principal amount of up to $330,000, which shall be funded in six tranches, each amounting to $50,000.
The Note has a 10% original issuance discount to offset transaction, diligence and legal costs. The Note bears an interest rate
of 10% and the maturity date for each funded tranche will be 12 months from the date on which the funds are received by the Company.
Then note is convertible into shares of Company’s common stock at a 37.5% discount to the lowest volume-weighted average
price for the Company’s common stock during the 15 trading days immediately preceding a conversion date. The Note also contain
certain representations, warranties, covenants and events of default, and increases in the amount of the principal and interest
rates under the Note in the event of such defaults. In 2016, the Company had received three of the six tranches amounting to $150,000
of net proceeds, net of the original issue discount of $15,000. The funded tranches have maturity dates between August 17, 2017
and September 13, 2017. In connection with the issuance of the note, the Company recorded a premium of $99,000 as the note is considered
stock settled debt under ASC 480, which was fully accreted during as of September 30, 2016. During the three months ended $37,500
of the outstanding principal and interest of the note was converted into 300,000,000 shares of common stock. As of March 31, 2017,
the outstanding principal and interest on the note was $138,042. On August 17, 2016,
the Company closed a Securities Purchase Agreement (“SPA”) with a lender, providing for the purchase of two Convertible
Redeemable Notes in the aggregate principal amount of $105,264 (the “Notes”), with the first note being in the amount
of $52,632 (“Note I”) and the second note being in the amount of $52,632 (“Note II”). Note I was funded
on August 17, 2016, with a maturity date of August 17, 2017, pursuant to Note I, the Company received $45,000 of net proceeds,
net of original issue discount of $2,632 and legal fees of $5,000. Note II was initially paid for by the issuance of an offsetting
$50,000 secured note issued by the Lender to the Company (“Secured Note”). Note II was funded on February 17, 2017,
with a maturity date of August 17, 2017, pursuant to Note II, the Company received $45,000 of net proceeds, net of original issue
discount of $2,632 and legal fees of $5,000. The Notes bear an interest rate of 10%; and is convertible into shares of Company
common stock at the lesser of a 37.5% discount to the common stock price on the date of the note (which was $1.10) or a 37.5% discount
to the price of our common stock price at the time of conversion. The Notes also contain certain representations, warranties, covenants
and events of default, and increases in the amount of the principal and interest rates under the Notes in the event of such defaults.
In connection with the issuance of the Notes, the Company recorded a debt discount of $76,189 related to the embedded conversion
option derivative liability. The amortization expense related to that discount recorded was approximately $37,500 for the three
months ended March 31, 2017. During the three months ended March 31, 2017, $74,605 of the outstanding principal and interest was
converted into 775,336,000 shares of common stock. As of March 31, 2017, the outstanding principal and interest on the Notes was
$34,300. As the note conversion includes a “lesser of” pricing provision, a derivative liability of $112,277 was recorded
when the notes were entered into. The derivative liability is re-measured at each balance sheet date and reclassified to equity
on a pro-rata basis upon conversion of the note, the derivative liability balance for the Notes at March 31, 2017 was $20,795. On
November 30, 2016, ,
providing for the purchase of three Convertible Redeemable Notes in the aggregate principal amount of $183,750 (the “Notes”),
with the first note being in the amount of $52,500 (“Note I”), the second note being in the amount of $52,500 (“Note
II”), and the third note being in the amount of $78,750 (“Note III”). Note II was initially paid for by the
issuance of an offsetting $50,000 secured note issued to the Company by the lender (“Secured Note”), and Note III was
initially be paid for by the issuance of an offsetting $75,000 secured note issued to the Company by the lender. Funding of Note
II and Note III is subject to the mutual agreement of the lender and the Company. The lender is required to pay the principal amount
of the Secured Notes in cash and in full prior to executing any conversions under Note II and Note III. The Notes bear an interest
rate of 10%, and are due and payable on November 30, 2017. The Notes may be converted by the lender at any time into shares of
Company’s common stock (as determined in the Notes) calculated at the time of conversion, except for Note II and Note III,
which require full payment of the Secured Notes by the Investor before conversions may be made. The Notes (subject to funding in
the case of Note II and Note III) lowest closing bid price of the common stock 15 prior trading days including the day upon
which a notice of conversion is received by the Company. On
January 18, 2017, closed a Securities Purchase Agreement (“SPA”)
with a lender, providing for the purchase of two Convertible Redeemable Notes in the aggregate principal amount of $200,000 (the
“Notes”), with the first note being in the amount of $100,000 (“Note I”), and the second note being in
the amount of $100,000 (“Note II”). Note I was funded on January 18, 2017, with the Company receiving $70,000 of net
proceeds (net of legal fees and OID). Note II will initially be paid for by the issuance of an offsetting $88,000 secured note
issued to the Company by the lender (the “Secured Note”). The funding of Note II is subject to the mutual agreement
of the lender and the Company. The lender is required to pay the principal amount of the Secured Note in cash and in full prior
to executing any conversions under Note II. The Notes bear an interest rate of 10%, and are due and payable on January 13, 2018.
The Not |
