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<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><font style="font-size: 10pt; text-transform: uppercase">Note
1:	Nature of Operations</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-align: justify"><font style="font-size: 10pt; letter-spacing: -0.1pt">TapImmune
Inc. (the “Company”), a Nevada corporation incorporated in 1992, is a biotechnology Company focusing on immunotherapy
specializing in the development of innovative peptide and gene-based immunotherapeutics and vaccines for the treatment of oncology
and infectious disease. Unlike other vaccine technologies that narrowly address the initiation of an immune response, TapImmune's
approach broadly stimulates the cellular immune system by enhancing the function of killer T-cells and T-helper cells and by restoring
antigen presentation in tumor cells allowing their recognition and killing by the immune system. </font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><font style="font-size: 10pt; text-transform: uppercase">NOTE
2: Basis of Presentation</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-align: justify"><font style="font-size: 10pt; letter-spacing: -0.1pt">The
accompanying unaudited condensed financial statements have been prepared in accordance with the accounting principles generally
accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions
to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis
as the Company prepares its annual audited consolidated financial statements. The condensed consolidated balance sheet as of June
30, 2015, condensed consolidated statements of interim financials include all adjustments, consisting only of normal recurring
adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash
flows for the periods presented.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 10pt; letter-spacing: -0.1pt">The
results for the statement of operations are not necessarily indicative of results to be expected for the year ending December
31, 2015 or for any future interim period. The condensed balance sheet at December 31, 2014 has been derived from audited financial
statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements.
The accompanying condensed financial statements should be read in conjunction with the consolidated financial statements for the
year ended December 31, 2014, and notes thereto included in the Company’s annual report on Form 10-K.</font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><font style="font-size: 10pt; text-transform: uppercase">NOTE
3: LIQUIDITY AND FINANCIAL CONDITION</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-align: justify"><font style="font-size: 10pt; letter-spacing: -0.1pt">The
Company’s activities since inception have consisted principally of acquiring product and technology rights, raising capital,
and performing research and development. Successful completion of the Company’s development programs and, ultimately, the
attainment of profitable operations are dependent on future events, including, among other things, its ability to access potential
markets; secure financing, develop a customer base; attract, retain and motivate qualified personnel; and develop strategic alliances.
From inception, the Company has been funded by a combination of equity and debt financings. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-align: justify"><font style="font-size: 10pt; letter-spacing: -0.1pt">The
Company expects to continue to incur substantial losses over the next several years during its development phase. To fully execute
its business plan, the Company will need to complete certain research and development activities and clinical studies. Further,
the Company’s product candidates will require regulatory approval prior to commercialization. These activities may span
many years and require substantial expenditures to complete and may ultimately be unsuccessful. Any delays in completing these
activities could adversely impact the Company. The Company plans to meet its capital requirements primarily through issuances
of debt and equity securities and, in the longer term, revenue from product sales.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-align: justify"><font style="font-size: 10pt; letter-spacing: -0.1pt">As
of June 30, 2015, the Company had cash and cash equivalents of approximately $3,105,000. Historically, the Company has net losses
and negative cash flows from operations. The Company believes its current capital resources are not sufficient to support its
operations. Management intends to continue its research efforts and to finance operations of the Company through debt and/or equity
financings. Management plans to seek additional debt and/or equity financing through private or public offerings or through a
business combination or strategic partnership. There can be no assurance that the Company will be successful in obtaining additional
financing on favorable terms, or at all. These matters raise substantial doubt about the Company’s ability to continue as
a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.</font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><font style="font-size: 10pt; text-transform: uppercase">Note
5:	pOTENTIALLY DILUTIVE SECURITIES</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-align: justify"><font style="font-size: 10pt">Options,
warrants, and convertible debt outstanding were all considered anti-dilutive for the six months ended June 30, 2015 and 2014,
due to net losses.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0"><font style="font-size: 10pt">The following securities were
not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font-size: 10pt; text-transform: uppercase"><b> </b></font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td colspan="6" style="border-bottom: black 1pt solid; padding-right: 5.8pt; text-align: center"><font style="font-size: 10pt"><b>June
30,</b></font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; padding-right: 1.8pt; text-align: center"><font style="font-size: 10pt"><b>2015</b></font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; padding-right: 1.8pt; text-align: center"><font style="font-size: 10pt"><b>2014</b></font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="width: 66%; padding-right: 0.8pt"><font style="font-size: 10pt">Common stock options</font></td>
<td style="width: 2%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="width: 1%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="width: 13%; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">465,000</font></td>
<td style="width: 1%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="width: 2%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="width: 1%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="width: 13%; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">65,000</font></td>
<td style="width: 1%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 0.8pt"><font style="font-size: 10pt">Common stock warrants - equity treatment</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">71,869,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">185,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 0.8pt"><font style="font-size: 10pt">Common stock warrants - liability treatment</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">12,514,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">49,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="background-color: white; padding-right: 0.8pt"><font style="font-size: 10pt">Convertible notes</font></td>
<td style="background-color: white; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 1pt solid; background-color: white; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 1pt solid; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">7,000</font></td>
<td style="background-color: white; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 0.8pt"><font style="font-size: 10pt">Potentially dilutive securities</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 6.75pt double; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 6.75pt double; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">84,848,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 6.75pt double; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 6.75pt double; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">306,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid"><font style="font-size: 10pt; font-weight: normal; text-transform: uppercase">Note
7:	Promissory notes, related party</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0; text-align: justify"><font style="font-size: 10pt">The Company
has outstanding promissory notes in the amount of $52,942 (December 31, 2014 - $52,942), of which $23,000 of promissory notes
are from an officer and a director of the Company. The promissory notes bear no interest charges and have no fixed repayment terms.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 0"><font style="font-size: 10pt">The following securities were
not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font-size: 10pt; text-transform: uppercase"><b> </b></font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td colspan="6" style="border-bottom: black 1pt solid; padding-right: 5.8pt; text-align: center"><font style="font-size: 10pt"><b>June
30,</b></font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; padding-right: 1.8pt; text-align: center"><font style="font-size: 10pt"><b>2015</b></font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; padding-right: 1.8pt; text-align: center"><font style="font-size: 10pt"><b>2014</b></font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="width: 66%; padding-right: 0.8pt"><font style="font-size: 10pt">Common stock options</font></td>
<td style="width: 2%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="width: 1%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="width: 13%; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">465,000</font></td>
<td style="width: 1%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="width: 2%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="width: 1%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="width: 13%; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">65,000</font></td>
<td style="width: 1%; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 0.8pt"><font style="font-size: 10pt">Common stock warrants - equity treatment</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">71,869,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">185,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 0.8pt"><font style="font-size: 10pt">Common stock warrants - liability treatment</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">12,514,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">49,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="background-color: white; padding-right: 0.8pt"><font style="font-size: 10pt">Convertible notes</font></td>
<td style="background-color: white; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 1pt solid; background-color: white; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 1pt solid; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">7,000</font></td>
<td style="background-color: white; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 0.8pt"><font style="font-size: 10pt">Potentially dilutive securities</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 6.75pt double; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 6.75pt double; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">84,848,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 6.75pt double; padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td>
<td style="border-bottom: black 6.75pt double; padding-right: 0.8pt; text-align: right"><font style="font-size: 10pt">306,000</font></td>
<td style="padding-right: 0.8pt"><font style="font-size: 10pt"> </font></td></tr>
</table>
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3247910
224448
400110
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<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><font style="text-transform: uppercase">Note
4:	SIGNIFICANT ACCOUNTING POLICIES</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There have been no material changes in
the Company’s significant accounting policies to those previously disclosed in the Company’s annual report on Form
10-K, which was filed with the SEC on April 15, 2015.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Prior Period Reclassifications</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>The expense categories of the comparable
prior period have been reclassified for comparability with the June 30, 2015 presentation. These reclassifications had no effect
on previously reported net loss. </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><font style="text-transform: uppercase">Note
6:	DERIVATIVE LIABILITY - WARRANTs AND DERIVATIVE LIABILITY – CONVERSION OPTION</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A summary of quantitative information with
respect to valuation methodology and significant unobservable inputs used for the Company’s common stock purchase warrants
that are categorized within Level 3 of the fair value hierarchy for the six months ended 2015 and 2014 is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Share Purchase Warrants</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="6" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Weighted Average Inputs for the Period</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Date of valuation</b><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>For the Six Months Ending June 30, 2015</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>For the Six Months Ending June 30, 2014</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr>
<td style="width: 38%; padding-right: 5.4pt; padding-left: 5.4pt">Fair market value of stock</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0.96</td>
<td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0.02</td>
<td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Strike price</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0.13</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">5.84</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Volatility (annual)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">158.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">159.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Risk-free rate</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1.63</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1.08</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Contractual term (years)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">4.60</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">3.58</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Dividend yield (per share)</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The foregoing assumptions are reviewed
quarterly and are subject to change based primarily on management’s assessment of the probability of the events described
occurring. Accordingly, changes to these assessments could materially affect the valuations.</p>
<hr class="msocomoff" align="left" size="1" style="width: 33%" /><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Financial Assets and Liabilities Measured at Fair Value on
a Recurring Basis</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial assets and liabilities measured
at fair value on a recurring basis are summarized below and disclosed on the balance sheet under Derivative liability – warrants:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
<td style="vertical-align: bottom; border-top: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left"> </td>
<td colspan="6" style="vertical-align: bottom; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>As of June 30, 2015 </b></p></td>
<td> </td></tr>
<tr>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p></td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td colspan="3" style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Fair Value Measurements </b></td>
<td colspan="2" style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td> </td></tr>
<tr>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p></td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Fair Value</b></td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 1</b></td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 2</b></td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 3</b></td>
<td colspan="2" style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Total</b></td>
<td> </td></tr>
<tr>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">Derivative liability - warrants</td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td colspan="2" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td>
<td colspan="2" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td></tr>
<tr style="vertical-align: bottom">
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Total</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td></tr>
<tr>
<td style="width: 36%"> </td>
<td style="width: 13%"> </td>
<td style="width: 11%"> </td>
<td style="width: 11%"> </td>
<td style="width: 11%"> </td>
<td style="width: 1%"> </td>
<td style="width: 16%"> </td>
<td style="width: 1%"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-top: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left"> </td>
<td colspan="5" style="border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>As of December 31, 2014</b></p></td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td colspan="3" style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Fair Value Measurements </b></td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 36%; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p></td>
<td style="width: 13%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Fair Value</b></td>
<td style="width: 12%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 1</b></td>
<td style="width: 13%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 2</b></td>
<td style="width: 13%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 3</b></td>
<td style="width: 13%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Total</b></td></tr>
<tr>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">Derivative liability - warrants</td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td></tr>
<tr>
<td style="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Total</td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td>
<td style="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There were no transfers between Level 1,
2 or 3 during the three months ended June 30, 2015.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table presents changes in Level 3 liabilities
measured at fair value for the six months ended June 30, 2015:</p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 60%; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"> </td>
<td style="width: 40%; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">Derivative liability – warrants</td></tr>
<tr style="vertical-align: top">
<td style="padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt">Balance – December 31, 2014</td>
<td style="border-top: Black 1pt solid; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$        9,000 </td></tr>
<tr>
<td style="vertical-align: top; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt">Additions during the period</td>
<td style="vertical-align: bottom; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,658,000 </td></tr>
<tr>
<td style="vertical-align: top; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt">Change in fair value of warrant liability</td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">9,006,000 </td></tr>
<tr style="vertical-align: top">
<td style="padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt">Balance – June 30, 2015</td>
<td style="border-bottom: Black 1.5pt solid; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$ 11,673,000 </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The valuation of warrants is subjective
and is affected by changes in inputs to the valuation model including the price per share of common stock, the historical volatility
of the stock price, risk-free rates based on U.S. Treasury security yields, the expected term of the warrants and dividend yield.
Changes in these assumptions can materially affect the fair value estimate. The Company could ultimately incur amounts to settle
the warrant at a cash settlement value that is significantly different than the carrying value of the liability on the financial
statements. The Company will continue to classify the fair value of the warrants as a liability until the warrants are exercised,
expire, or are amended in a way that would no longer require these warrants to be classified as a liability. Changes in the fair
value of the common stock warrants liability are recognized as a component of other income (expense) in the Statements of Operations.]</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During 2014 the Company entered into numerous
extinguishment agreements with various holders. As a result the derivative liability associated with the bifurcated conversion
options were extinguished at the date of conversion and recorded in the loss on extinguishment in the Statement of Operations.
The inputs utilized in the final mark to market were as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Conversion Option</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="6" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Weighted Average Inputs for the Period</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Date of valuation</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>For the Quarter Ending June 30, 2015</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>For the Quarter Ending June 30, 2014</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr>
<td style="width: 38%; padding-right: 5.4pt; padding-left: 5.4pt">Strike price</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1.03</td>
<td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Volatility (annual)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">199.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Risk-free rate</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0.05</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Contractual term (years)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0.24</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Dividend yield (per share)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Fair value of Conversion Option at extinguishment</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">708,000</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Share Purchase Warrants</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="6" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Weighted Average Inputs for the Period</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Date of valuation</b><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>For the Six Months Ending June 30, 2015</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>For the Six Months Ending June 30, 2014</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr>
<td style="width: 38%; padding-right: 5.4pt; padding-left: 5.4pt">Fair market value of stock</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0.96</td>
<td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0.02</td>
<td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Strike price</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0.13</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">5.84</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Volatility (annual)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">158.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">159.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Risk-free rate</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1.63</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1.08</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Contractual term (years)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">4.60</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">3.58</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Dividend yield (per share)</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<hr class="msocomoff" align="left" size="1" style="width: 33%" />
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial assets and liabilities measured
at fair value on a recurring basis are summarized below and disclosed on the balance sheet under Derivative liability – warrants:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
<td style="vertical-align: bottom; border-top: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left"> </td>
<td colspan="6" style="vertical-align: bottom; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>As of June 30, 2015 </b></p></td>
<td> </td></tr>
<tr>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p></td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td colspan="3" style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Fair Value Measurements </b></td>
<td colspan="2" style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td> </td></tr>
<tr>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p></td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Fair Value</b></td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 1</b></td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 2</b></td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 3</b></td>
<td colspan="2" style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Total</b></td>
<td> </td></tr>
<tr>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">Derivative liability - warrants</td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td colspan="2" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td>
<td colspan="2" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td></tr>
<tr style="vertical-align: bottom">
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Total</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  11,673,000</td></tr>
<tr>
<td style="width: 36%"> </td>
<td style="width: 13%"> </td>
<td style="width: 11%"> </td>
<td style="width: 11%"> </td>
<td style="width: 11%"> </td>
<td style="width: 1%"> </td>
<td style="width: 16%"> </td>
<td style="width: 1%"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-top: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left"> </td>
<td colspan="5" style="border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>As of December 31, 2014</b></p></td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td colspan="3" style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Fair Value Measurements </b></td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 36%; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p></td>
<td style="width: 13%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Fair Value</b></td>
<td style="width: 12%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 1</b></td>
<td style="width: 13%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 2</b></td>
<td style="width: 13%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Level 3</b></td>
<td style="width: 13%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Total</b></td></tr>
<tr>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">Derivative liability - warrants</td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td></tr>
<tr>
<td style="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Total</td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td>
<td style="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td>
<td style="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$  9,000</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table presents changes in Level 3 liabilities
measured at fair value for the six months ended June 30, 2015:</p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 60%; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"> </td>
<td style="width: 40%; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">Derivative liability – warrants</td></tr>
<tr style="vertical-align: top">
<td style="padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt">Balance – December 31, 2014</td>
<td style="border-top: Black 1pt solid; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$        9,000 </td></tr>
<tr>
<td style="vertical-align: top; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt">Additions during the period</td>
<td style="vertical-align: bottom; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,658,000 </td></tr>
<tr>
<td style="vertical-align: top; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt">Change in fair value of warrant liability</td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">9,006,000 </td></tr>
<tr style="vertical-align: top">
<td style="padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt">Balance – June 30, 2015</td>
<td style="border-bottom: Black 1.5pt solid; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$ 11,673,000 </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Conversion Option</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="6" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><b>Weighted Average Inputs for the Period</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Date of valuation</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>For the Quarter Ending June 30, 2015</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>For the Quarter Ending June 30, 2014</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr>
<td style="width: 38%; padding-right: 5.4pt; padding-left: 5.4pt">Strike price</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1.03</td>
<td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Volatility (annual)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">199.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Risk-free rate</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0.05</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Contractual term (years)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0.24</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Dividend yield (per share)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Fair value of Conversion Option at extinguishment</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">-</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">$</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">708,000</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
3105000
84848000
306000
7000
12514000
49000
71869000
185000
465000
65000
1.03
0.13
5.84
1.00
0.50
1.58
1.59
0
0
0.0163
0.0108
P4Y7M6D
P3Y6M29D
0.96
0.02
-11673000
-11673000
-11673000
-9000
-9000
-9000
11673000
11673000
11673000
9000
9000
9000
2658000
9006000
0
0
0
0
1.99
0.0005
708000
P2M27D
P5Y15D
23000
84382892
65430
2659417
0.54
1.83
86730975
400000
-5000000
-7500
0.54
0.5
50
P3Y3M
P3Y3M4D
173000
0.001
0.001
500000000
500000000
38038921
20318815
38038921
20318815
0.001
0.001
0.001
0.001
0.001
1250000
1500000
1250000
1500000
0
0
0
0
0
0
0
0
10000000
10000000
-82685
317593
278
0.16
18.00
0.16
0.21
0.17
2.62
400000
465430
P4Y15D
P4Y7M21D
P4Y5M27D
18
18
0.40
0.20
1.55
1.55
1.27
1.27
0.0001
0.0001
0.0151
0.0151
P4Y1M24D
P1M17D
P3M15D
P4Y9M15D
P4Y9M15D
66000
5000000
2500000
2291014
12319995
2278694
12320
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><font style="text-transform: uppercase">Note
8:	Capital Stock</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>2015 Share Transactions</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Private placements</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In January, 2015, the Company entered into
a Securities Purchase Agreement with certain investors for the sale of 7,320,000 units at a purchase price of $0.20 per unit, for
a total purchase price of approximately $1,250,000, net of finders’ fee and offering expenses of approximately $214,000.
Each unit consisting of (i) one share of the Company’s Common Stock, (ii) one Series A warrant to purchase one share of common
stock, (iii) one Series B warrant to purchase one share of common stock (iv) one Series C warrant to purchase one share of common
stock, (v) one Series D warrant to purchase one share of common stock, and (vi) one Series E warrant to purchase one share of common
stock (the Series A, B, C, D and E warrants are hereby collectively referred to as the “January 2015 Warrants”). Series
A warrants are exercisable at $1.50 per share, with a five year term. Series B warrants are exercisable at $0.40 per share, with
a six month term. Series C warrants are exercisable at $1.00 per share, with a five year term. Series D warrants are exercisable
at $0.75 per share only if and to the extent that the Series B warrants are exercised, with a five year term from the date that
the Series B warrants are exercised. Series E warrants are exercisable at $1.25 per share, only if and to the extent that the Series
C warrants are exercised, with a five year term from the date that the Series C warrants are exercised.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to a placement agent agreement,
the Company agreed to issue warrants to purchase 366,000 common shares with substantially the same terms as the January 2015 Warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Series A warrants were issued with
price reset features. The fair value of these warrants was determined to be $1,346,000 and recognized as a derivative liability.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value of Series B, C, D &
E warrants was determined to be $4,635,000 and was included within equity.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In March, 2015, the Company entered into
a Securities Purchase Agreement with certain accredited investors for the sale of 5,000,000 units at a purchase price of $0.20
per unit, for a total purchase price of approximately $950,000, net of finders’ fee and offering expenses of approximately
$50,000. Each unit consisting of (i) one share of the Company’s Common Stock, (ii) one Series A warrant to purchase one share
of common stock, (iii) one Series B warrant to purchase one share of common stock (iv) one Series C warrant to purchase one share
of common stock, (v) one Series D warrant to purchase one share of common stock, and (vi) one Series E warrant to purchase one
share of common stock (the Series A, B, C, D and E warrants are hereby collectively referred to as the “March 2015 Warrants”).
The March 2015 Warrants have substantially the same terms as the January 2015 Warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to a placement agent agreement,
the Company agreed to issue warrants to purchase 125,000 common shares with substantially the same terms as the March 2015 Warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Series A warrants were issued with
price reset features. The fair value of these warrants was determined to be $744,000 and recognized as a derivative liability.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value of Series B, C, D &
E warrants was determined to be $2,588,000 and was included within equity.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In May 2015, the Company entered into a
restructuring agreement with the investors of the January 2015 and March 2015 private placements, where:</p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-family: Symbol">·</font></td><td style="text-align: justify">The exercise price of the Series A warrants was changed from $1.50 per warrant to $0.10 per warrant,</td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-family: Symbol">·</font></td><td style="text-align: justify">The exercise price of Series B warrants was changed from $0.40 per warrant to $0.20 per warrant,</td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-family: Symbol">·</font></td><td style="text-align: justify">Each warrant of Series B existing prior to the restructuring agreement was replaced with two warrants
of such series,</td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-family: Symbol">·</font></td><td style="text-align: justify">The exercise price of the Series C warrants was changed from $1.00 per warrant to $0.50 per warrant,
and</td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-family: Symbol">·</font></td><td style="text-align: justify">Each warrant of Series C existing prior to the restructuring agreement was replaced with two warrants
of such series.</td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a result of the restructuring agreement,
the Company issued an additional 12,320,000 Series B warrants and 12,320,000 Series C Warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The incremental fair value of Series A
warrants due to repricing was determined to be $568,000 and recognized as a derivative liability with a corresponding inducement
expense in the Statement of Operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The incremental fair value of Series B
and Series C warrants due to repricing and increasing the number of warrants was determined to be $7,688,000. The fair value of
these warrants was recognized as additional paid-in capital with a corresponding inducement expense in the Statement of Operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value was estimated immediately
prior to the date of the restructuring agreement using the Black-Scholes option pricing model with the following weighted average
assumptions:</p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Share Purchase Warrants</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="5" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Weighted Average Inputs</b></td>
<td> </td></tr>
<tr>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Date of valuation</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>May 28, 2015</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Strike price</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$ 0.40 – 1.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Volatility (annual)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">127.00 – 155.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Risk-free rate</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">.01 - 1.51</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Contractual term (years)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">.13 - 4.79</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Dividend yield (per share)</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="width: 40%"> </td>
<td style="width: 10%"> </td>
<td style="width: 9%"> </td>
<td style="width: 18%"> </td>
<td style="width: 4%"> </td>
<td style="width: 4%"> </td>
<td style="width: 2%"> </td>
<td style="width: 13%"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value was estimated immediately
after, on the date of the restructuring agreement, using the Black-Scholes option pricing model with the following weighted average
assumptions:</p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Share Purchase Warrants</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="5" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Weighted Average Inputs</b></td>
<td> </td></tr>
<tr>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Date of valuation</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>May 28, 2015</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Strike price</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$ 0.20 – 0.50</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Volatility (annual)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">127.00 – 155.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Risk-free rate</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">.01 - 1.51</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Contractual term (years)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">.29 - 4.79</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Dividend yield (per share)</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="width: 40%"> </td>
<td style="width: 10%"> </td>
<td style="width: 9%"> </td>
<td style="width: 18%"> </td>
<td style="width: 4%"> </td>
<td style="width: 4%"> </td>
<td style="width: 2%"> </td>
<td style="width: 13%"> </td></tr>
</table>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Share Purchase Warrants</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the six months ended June 30, 2015, a warrant holder
exercised 5,000,000 of Series C warrants at $0.50 per warrant for a total of $2,500,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A summary of the Company’s share purchase warrants as
of June 30, 2015 and changes during the period is presented below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 44%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="width: 18%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Number of</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Warrants</p></td>
<td style="width: 19%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Exercise Price</p></td>
<td style="width: 19%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Remaining Life</p></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><b>Balance, December 31, 2014</b></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,659,417 </td>
<td style="padding-right: 20.4pt; padding-left: 5.4pt; text-align: right">  1.83</td>
<td style="padding-right: 23.5pt; padding-left: 5.4pt; text-align: right">4.15</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Issued</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">86,730,975 </td>
<td style="padding-right: 20.4pt; padding-left: 5.4pt; text-align: right">0.54</td>
<td style="padding-right: 23.5pt; padding-left: 5.4pt; text-align: right">3.25</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Exercised</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(5,000,000)</td>
<td style="padding-right: 20.4pt; padding-left: 5.4pt; text-align: right">0.50</td>
<td style="padding-right: 23.5pt; padding-left: 5.4pt; text-align: right">-</td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">  Extinguished or expired</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(7,500)</td>
<td style="border-bottom: Black 1pt solid; padding-right: 20.4pt; padding-left: 5.4pt; text-align: right">50.00</td>
<td style="border-bottom: Black 1pt solid; padding-right: 23.5pt; padding-left: 5.4pt; text-align: right">-</td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Balance, June 30, 2015 </b></td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">84,382,892 </td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 20.4pt; padding-left: 5.4pt; text-align: right">$  0.54</td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 23.5pt; padding-left: 5.4pt; text-align: right">3.26</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Stock Compensation Plan</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 14, 2009, the Company adopted
the 2009 Stock Incentive Plan (the “2009 Plan”) which supersedes and replaces the 2007 Stock Plan. The 2009 Plan allows
for the issuance of up to 10,000,000 common shares. Options granted under the Plan shall be at prices and for terms as determined
by the Board of Directors.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 10, 2015, the Company granted
250,000 stock options at an exercise price of $0.145 per share, of which, 33,333 vested on May 31, 2015 and the remaining vesting
monthly over a nine month period, to a consultant of the Company. The term of the options is five years. The fair value of the
new grant was estimated at $33,000, or $0.133 per option, using the Black-Scholes Option Pricing Model with a risk free interest
rate of 1.52%, a dividend yield of 0%, volatility of 154.6%, and life of 5 years. The expensed portion of the value of these options
during the six months ended June 30, 2015 was $7,635, which was recorded as stock based consultant compensation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 6, 2015, the Company granted 150,000
stock options at an exercise price of $0.20 per share, vesting monthly over a twenty four month period, to a director of the Company.
The term of the options is five years. The fair value of the new grant was estimated at $29,000, or $0.194 per option, using the
Black-Scholes Option Pricing Model with a risk free interest rate of 1.70%, a dividend yield of 0%, volatility of 155.2%, and life
of 5 years. The expensed portion of the value of these options during the six months ended June 30, 2015 was $4,850, which was
recorded as stock based management compensation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Share purchase options</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A summary of the Company’s stock
options as of June 30, 2015 and changes during the period is presented below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 47%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-top: 12pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="width: 17%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Number of</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Options</p></td>
<td style="width: 18%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Exercise Price</p></td>
<td style="width: 18%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Remaining Life</p></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><b>Balance, December 31, 2013</b></td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">65,430 </td>
<td style="padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">  18.00</td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">5.04</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Issued</td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">- </td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">  Cancelled/Forfeited</td>
<td style="border-bottom: Black 1pt solid; padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="border-bottom: Black 1pt solid; padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="border-bottom: Black 1pt solid; padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">- </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 18.8pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><b>Balance, December 31, 2014</b></td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">65,430 </td>
<td style="padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">  18.00</td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">4.04</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Issued</td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">400,000 </td>
<td style="padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">0.17</td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">4.64</td></tr>
<tr style="vertical-align: bottom">
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Balance, June 30, 2015 </b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">465,430 </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">$  2.62</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">4.49</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At June 30, 2015, the intrinsic value of
the vested options was equal to $66,000 (2014 - $nil).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A summary of the status of the Company’s
unvested options as of June 30, 2015 is presented below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 47%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-top: 12pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="width: 17%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-top: 12pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="width: 18%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Number of</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Shares</p></td>
<td style="width: 18%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Grant-Date</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Fair Value</p></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><b>Unvested, December 31, 2014</b></td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 5.3pt; padding-left: 5.4pt; text-align: right">278 </td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">$  18.00</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Granted</td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 5.3pt; padding-left: 5.4pt; text-align: right">400,000 </td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">0.16</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Vested</td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 5.3pt; padding-left: 5.4pt; text-align: right">(82,685)</td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">0.21</td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">  Cancelled</td>
<td style="border-bottom: Black 1pt solid; padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.3pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="border-bottom: Black 1pt solid; padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">-</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 5.3pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Unvested, June 30, 2015</b></td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 5.3pt; padding-left: 5.4pt; text-align: right">317,593 </td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">$  0.16</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value was estimated immediately
prior to the date of the restructuring agreement using the Black-Scholes option pricing model with the following weighted average
assumptions:</p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Share Purchase Warrants</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="5" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Weighted Average Inputs</b></td>
<td> </td></tr>
<tr>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Date of valuation</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>May 28, 2015</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Strike price</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$ 0.40 – 1.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Volatility (annual)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">127.00 – 155.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Risk-free rate</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">.01 - 1.51</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Contractual term (years)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">.13 - 4.79</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Dividend yield (per share)</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="width: 40%"> </td>
<td style="width: 10%"> </td>
<td style="width: 9%"> </td>
<td style="width: 18%"> </td>
<td style="width: 4%"> </td>
<td style="width: 4%"> </td>
<td style="width: 2%"> </td>
<td style="width: 13%"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value was estimated immediately
after, on the date of the restructuring agreement, using the Black-Scholes option pricing model with the following weighted average
assumptions:</p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Share Purchase Warrants</b></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="5" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"><b>Weighted Average Inputs</b></td>
<td> </td></tr>
<tr>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Date of valuation</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>May 28, 2015</b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Strike price</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$ 0.20 – 0.50</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Volatility (annual)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">127.00 – 155.00</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Risk-free rate</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">.01 - 1.51</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt">Contractual term (years)</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">.29 - 4.79</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Dividend yield (per share)</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">%</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Share Purchase Warrants</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the six months ended June 30, 2015, a warrant holder
exercised 5,000,000 of Series C warrants at $0.50 per warrant for a total of $2,500,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A summary of the Company’s share purchase warrants as
of June 30, 2015 and changes during the period is presented below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 44%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="width: 18%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Number of</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Warrants</p></td>
<td style="width: 19%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Exercise Price</p></td>
<td style="width: 19%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Remaining Life</p></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><b>Balance, December 31, 2014</b></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,659,417 </td>
<td style="padding-right: 20.4pt; padding-left: 5.4pt; text-align: right">  1.83</td>
<td style="padding-right: 23.5pt; padding-left: 5.4pt; text-align: right">4.15</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Issued</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">86,730,975 </td>
<td style="padding-right: 20.4pt; padding-left: 5.4pt; text-align: right">0.54</td>
<td style="padding-right: 23.5pt; padding-left: 5.4pt; text-align: right">3.25</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Exercised</td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(5,000,000)</td>
<td style="padding-right: 20.4pt; padding-left: 5.4pt; text-align: right">0.50</td>
<td style="padding-right: 23.5pt; padding-left: 5.4pt; text-align: right">-</td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">  Extinguished or expired</td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">(7,500)</td>
<td style="border-bottom: Black 1pt solid; padding-right: 20.4pt; padding-left: 5.4pt; text-align: right">50.00</td>
<td style="border-bottom: Black 1pt solid; padding-right: 23.5pt; padding-left: 5.4pt; text-align: right">-</td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Balance, June 30, 2015 </b></td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">84,382,892 </td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 20.4pt; padding-left: 5.4pt; text-align: right">$  0.54</td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 23.5pt; padding-left: 5.4pt; text-align: right">3.26</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Share purchase options</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A summary of the Company’s stock
options as of June 30, 2015 and changes during the period is presented below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 47%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-top: 12pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="width: 17%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Number of</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Options</p></td>
<td style="width: 18%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Exercise Price</p></td>
<td style="width: 18%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Remaining Life</p></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><b>Balance, December 31, 2013</b></td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">65,430 </td>
<td style="padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">  18.00</td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">5.04</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Issued</td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">- </td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">  Cancelled/Forfeited</td>
<td style="border-bottom: Black 1pt solid; padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="border-bottom: Black 1pt solid; padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="border-bottom: Black 1pt solid; padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">- </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 18.8pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><b>Balance, December 31, 2014</b></td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">65,430 </td>
<td style="padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">  18.00</td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">4.04</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Issued</td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">400,000 </td>
<td style="padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">0.17</td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">4.64</td></tr>
<tr style="vertical-align: bottom">
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Balance, June 30, 2015 </b></td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 6.45pt; padding-left: 5.4pt; text-align: right">465,430 </td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 18.8pt; padding-left: 5.4pt; text-align: right">$  2.62</td>
<td style="border-top: Black 1pt solid; border-bottom: Black 1.5pt solid; padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">4.49</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At June 30, 2015, the intrinsic value of
the vested options was equal to $66,000 (2014 - $nil).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A summary of the status of the Company’s
unvested options as of June 30, 2015 is presented below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 47%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-top: 12pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="width: 17%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-top: 12pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="width: 18%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Number of</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Shares</p></td>
<td style="width: 18%; border-top: Black 1.5pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Grant-Date</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Fair Value</p></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><b>Unvested, December 31, 2014</b></td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 5.3pt; padding-left: 5.4pt; text-align: right">278 </td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">$  18.00</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Granted</td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 5.3pt; padding-left: 5.4pt; text-align: right">400,000 </td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">0.16</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt">  Vested</td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 5.3pt; padding-left: 5.4pt; text-align: right">(82,685)</td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">0.21</td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">  Cancelled</td>
<td style="border-bottom: Black 1pt solid; padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.3pt; padding-left: 5.4pt; text-align: right">- </td>
<td style="border-bottom: Black 1pt solid; padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">-</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 5.3pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="padding-right: 21.95pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1.5pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Unvested, June 30, 2015</b></td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 6.45pt; padding-left: 5.4pt; text-align: right"> </td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 5.3pt; padding-left: 5.4pt; text-align: right">317,593 </td>
<td style="border-bottom: Black 1.5pt solid; padding-right: 21.95pt; padding-left: 5.4pt; text-align: right">$  0.16</td></tr>
</table>
9000
11673000
52942
46140771
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><u>NOTE 9:	SUBSEQUENT EVENTS
</u></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">1.</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Between July 16, 2015 and August 13, 2015, holders of the Series B warrant exercised 7,890,000 of the Series B Warrants registered under our recent registration statements on Form S-1 resulting in proceeds of $1,578,000 to the Company. </font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td><font style="font: 10pt Times New Roman, Times, Serif">2.</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On July 21, 2015, the Company entered
into a License and Assignment Agreement with the Mayo Foundation for Medical Education and Research (“Mayo
Foundation”) pursuant to which we acquired certain intellectual property rights from the Mayo Foundation for the
development and commercialization of certain products, methods and processes property relating to a folate receptor alpha
immunotherapeutic vaccine comprised of a set of unique peptide epitopes targeting breast, lung and ovarian cancer. The Mayo
Foundation granted us a license (with a right to sublicense) on a worldwide basis to make, sell and use products for
therapeutic use against breast, ovarian, lung and other cancers that express folate receptor alpha.  This license
is an exclusive license for products that are based on the intellectual property and non-exclusive for products that are
based on Mayo Foundation know–how and materials. The intellectual property that is being licensed includes (i) U.S.
patent application numbers 12/303,054 and 13/202,236, (ii) U.S. patent number 8,486,412 and 8,858,952 and provisionals, (iii)
divisionals including 13/917,410 and (iv) continuations including 14/484,057. The Mayo Foundation granted this license in
exchange for an initial upfront payment of $350,000, which was made on July 21, 2015. Upon the payment of the initial upfront
payment, the Mayo Foundation assigned to us IND # 14546, and we assumed all responsibility and liability for this
investigative new drug application. In addition to the initial upfront payment, we are to pay additional upfront payments, an
annual license maintenance fee, milestone fees and royalty fees (which will be subject to a minimum annual royalty fee once
royalty fees are due).</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">	3.	
On July 31, 2015, the Company issued to its counsel 118,450 shares of common stock for legal services rendered through January
21, 2015. Such shares were authorized to be issued on January 23, 2015, but were not issued until July 31, 2015.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">	4.	
On August 10, 2015, the Company issued 50,000 shares of common stock as full settlement of a dispute with a marketing consultant
that provided services to the Company in 2014 and 2015.</p>