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<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><b>Note
1:	Nature of Operations</b></font></p>
<p style="margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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: 0pt 0; border-bottom: Black 0.5pt solid; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><b>NOTE
2: Basis of Presentation</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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 September
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: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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: 0pt 0; border-bottom: Black 0.5pt solid"><font style="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><b>NOTE
3: LIQUIDITY AND FINANCIAL CONDITION</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">As
of September 30, 2015, the Company had cash and cash equivalents of approximately $6,087,000. 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: 0pt 0; border-bottom: Black 0.5pt solid"><font style="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><b>Note
4:	SIGNIFICANT ACCOUNTING POLICIES</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Prior
Period Reclassifications</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
expense categories of the comparable prior period have been reclassified for comparability with the September 30, 2015 presentation.
These reclassifications had no effect on previously reported net loss.</font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><font style="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><b>Note
5:	net income (loss) per share</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Basic
income (loss) per common share is computed by dividing net income by the weighted average number of common shares outstanding
during the reporting period. Diluted income per common share is computed similar to basic income per common share except that
it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised
or converted into common stock.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
following table sets forth the computation of income (loss) per share:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Three Months Ended</b><br /> <b>September 30,</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Nine Months Ended</b><br /> <b>September 30,</b></font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2015</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014 </b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2015</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: right"> </td><td> </td>
<td colspan="3" style="text-align: right"> </td><td> </td>
<td colspan="3" style="text-align: right"> </td><td> </td>
<td colspan="3" style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 40%; text-align: left">Net income (loss)</td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">2,483,988</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">(1,567,836</td><td style="width: 1%; text-align: left">)</td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">(16,943,377</td><td style="width: 1%; text-align: left">)</td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">(30,146,586</td><td style="width: 1%; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Weighted average shares outstanding - basic</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">48,583,003</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">17,310,708</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">36,651,565</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,292,886</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Common stock warrants</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">31,959,990</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt">Common stock options</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">400,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt">Weighted average shares outstanding - diluted</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">80,944,993</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">17,310,708</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">36,651,565</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">13,292,886</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Net loss per share data: <br />Basic</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">0.05</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(0.09</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(0.46</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(2.27</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt">Diluted</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.03</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.09</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.46</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(2.27</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Options,
warrants, and convertible debt outstanding were all considered anti-dilutive for the nine months ended September 30, 2015 and
2014, due to net losses.</font></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"><font style="font: 10pt Times New Roman, Times, Serif">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: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Nine Months Ended </b><br /> <b>September 30</b></font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2015</b></font></td><td> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; text-align: left; padding-left: 5.4pt">Common stock options</td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right">465,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right">65,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Common stock warrants - equity treatment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">47,032,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">185,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 5.4pt">Common stock warrants - liability treatment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">12,514,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">49,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Convertible notes</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Potentially dilutive securities</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">60,011,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">306,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><font style="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><b>Note
6:	DERIVATIVE LIABILITY - WARRANTs AND DERIVATIVE LIABILITY – CONVERSION OPTION</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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 nine months ended 2015
and 2014 is as follows:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Stock Purchase Warrants</b></font></td><td style="padding-bottom: 1pt; border-bottom: Black 1pt solid"> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted Average Inputs for the Period</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Date of valuation</b></font></td><td style="padding-bottom: 1pt; border-bottom: Black 1pt solid"> </td>
<td colspan="3" style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Nine Months Ending September 30, 2015</b></font></td><td style="padding-bottom: 1pt; border-bottom: Black 1pt solid"> </td>
<td colspan="3" style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Nine Months Ending September 30, 2014</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; padding-left: 5.4pt">Strike price</td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">0.13</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">5.84</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Volatility (annual)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">158.00</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">156.00</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-left: 5.4pt">Risk-free rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.63</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.07</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Contractual term (years)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4.34</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3.33</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 5.4pt; border-bottom: Black 1pt solid">Dividend yield (per share)</td><td style="padding-bottom: 1pt; border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0</td><td style="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">%</td><td style="padding-bottom: 1pt; border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0</td><td style="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><i> </i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><i>Financial
Assets and Liabilities Measured at Fair Value on a Recurring Basis</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="19" style="border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of September 30, 2015 </b></font></p></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="11" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value Measurements </b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 1</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 2</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 3</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Total</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 35%; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Derivative liability - warrants</td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"> </td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">—  </td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"> </td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">—  </td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; padding-left: 5.4pt">Total</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="19" style="border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of December 31, 2014</b></font></p></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="11" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value Measurements </b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 1</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 2</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 3</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Total</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 35%; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Derivative liability - warrants</td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"> </td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">—  </td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"> </td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">—  </td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; padding-left: 5.4pt">Total</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">There
were no transfers between Level 1, 2 or 3 during the nine months ended September 30, 2015. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">The
following table presents changes in Level 3 liabilities measured at fair value for the nine months ended September 30, 2015:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="text-align: center; vertical-align: top">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: Black 1pt solid">Derivative liability – warrants</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%; padding-left: 5.4pt">Balance – December 31, 2014</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">9,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Additions during the period</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,659,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Change in fair value of warrant liability</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,760,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; padding-left: 5.4pt">Balance – September 30, 2015</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">7,428,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<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"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During
2014 the Company entered into numerous extinguishment agreements with various convertible note 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:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif"><b>Conversion Option</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted Average Inputs for the Period</b></font></td></tr>
<tr style="text-align: left; vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif"><b>Date of valuation</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: Black 1pt solid; text-align: center; vertical-align: middle"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Quarter Ending September 30, 2015</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: Black 1pt solid; text-align: center; vertical-align: middle"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Quarter Ending September 30, 2014</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; padding-left: 5.4pt">Strike price</td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">—  </td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">1.03</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Volatility (annual)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">199.00</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-left: 5.4pt">Risk-free rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.05</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Contractual term (years)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.24</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 5.4pt">Dividend yield (per share)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Fair value of Conversion Option at extinguishment</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">708,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><font style="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><b>Note
7:	Promissory notes, related party</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
Company has outstanding promissory notes in the amount of $52,942 (December 31, 2014 - $52,942), of which $23,000 of promissory
notes relate to amounts owed to 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: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><font style="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><b>Note
8:	Capital Stock</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>2015
Share Transactions</b></font></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"><font style="font: 10pt Times New Roman, Times, Serif"><i>Private
placements</i></font></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"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></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"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
fair value of Series B, C, D & E warrants was determined to be $4,635,000 and was included within equity.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></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"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></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"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
fair value of Series B, C, D & E warrants was determined to be $2,588,000 and was included within equity.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In
May 2015, the Company entered into a restructuring agreement with the investors of the January 2015 and March 2015 private placements,
where:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></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">•</td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
exercise price of the Series A warrants was changed from $1.50 per warrant to $0.10 per
warrant,</font></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: 10pt Times New Roman, Times, Serif">•</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
exercise price of Series B warrants was changed from $0.40 per warrant to $0.20 per warrant,</font></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: 10pt Times New Roman, Times, Serif">•</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Each
warrant of Series B existing prior to the restructuring agreement was replaced with two
warrants of such series,</font></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: 10pt Times New Roman, Times, Serif">•</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
exercise price of the Series C warrants was changed from $1.00 per warrant to $0.50 per
warrant, and</font></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: 10pt Times New Roman, Times, Serif">•</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Each
warrant of Series C existing prior to the restructuring agreement was replaced with two
warrants of such series.</font></td></tr></table>
<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"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></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"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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:  </font></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>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<tr>
<td style="font-weight: bold; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 0.5pt solid; width: 56%">Share Purchase Warrants</td>
<td style="font-weight: bold; vertical-align: bottom; border-top: Black 0.5pt solid; border-bottom: Black 0.5pt solid; text-align: center; width: 41%">Weighted Average Inputs</td>
<td style="font-weight: bold; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 0.5pt solid; width: 3%"> </td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; border-top-color: Black; border-top-width: 0.5pt">Date of valuation</td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right; border-top-color: Black; border-top-width: 0.5pt"><p style="margin: 0pt 0">May 28, 2015</p>
</td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; border-top-color: Black; border-top-width: 0.5pt"></td></tr>
<tr style="vertical-align: middle; background-color: rgb(204,238,255)">
<td>Strike price</td>
<td style="text-align: right">$ 0.40 – 1.00</td>
<td> </td></tr>
<tr style="vertical-align: middle; background-color: White">
<td>Volatility (annual)</td>
<td style="text-align: right">127.00 – 155.00</td>
<td>%</td></tr>
<tr style="vertical-align: middle; background-color: rgb(204,238,255)">
<td>Risk-free rate</td>
<td style="text-align: right">.01 - 1.51</td>
<td>%</td></tr>
<tr style="vertical-align: middle; background-color: White">
<td>Contractual term (years)</td>
<td style="text-align: right">.13 - 4.79</td>
<td> </td></tr>
<tr style="vertical-align: middle; background-color: rgb(204,238,255)">
<td style="border-bottom: Black 1pt solid">Dividend yield (per share)</td>
<td style="border-bottom: Black 1pt solid; text-align: right">0</td>
<td style="border-bottom: Black 1pt solid">%</td></tr>
</table>
<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"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<tr>
<td style="font-weight: bold; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 0.5pt solid; width: 56%">Share Purchase Warrants</td>
<td style="font-weight: bold; vertical-align: bottom; border-top: Black 0.5pt solid; border-bottom: Black 0.5pt solid; text-align: center; width: 41%">Weighted Average Inputs</td>
<td style="font-weight: bold; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 0.5pt solid; width: 3%"> </td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; border-top-color: Black; border-top-width: 0.5pt">Date of valuation</td>
<td style="font-weight: bold; border-bottom: Black 1pt solid; text-align: right"><p style="margin: 0pt 0">May 28, 2015</p>
</td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; border-top-color: Black; border-top-width: 0.5pt"></td></tr>
<tr style="vertical-align: middle; background-color: rgb(204,238,255)">
<td>Strike price</td>
<td style="text-align: right">$
0.20 – 0.50 </td>
<td> </td></tr>
<tr style="vertical-align: middle; background-color: White">
<td>Volatility (annual)</td>
<td style="text-align: right">127.00 – 155.00</td>
<td>%</td></tr>
<tr style="vertical-align: middle; background-color: rgb(204,238,255)">
<td>Risk-free rate</td>
<td style="text-align: right">.01 - 1.51</td>
<td>%</td></tr>
<tr style="vertical-align: middle; background-color: White">
<td>Contractual term (years)</td>
<td style="text-align: right">29
- 4.79</td>
<td> </td></tr>
<tr style="vertical-align: middle; background-color: rgb(204,238,255)">
<td style="border-bottom: Black 1pt solid">Dividend yield (per share)</td>
<td style="border-bottom: Black 1pt solid; text-align: right">0</td>
<td style="border-bottom: Black 1pt solid">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">Share
Purchase Warrants</font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">During
the nine months ended September 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.</font></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"><font style="font: 10pt Times New Roman, Times, Serif">During
the nine months ended September 30, 2015, warrant holders exercised 24,639,995 of Series B warrants at $0.20 per warrant for a
total of $4,928,000.</font></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"><font style="font: 10pt Times New Roman, Times, Serif">A summary
of the Company’s share purchase warrants as of September 30, 2015 and changes during the period is presented below:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Number of <br />Warrants</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Weighted Average <br />Exercise Price</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Weighted Average <br />Remaining Life</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: center; padding-left: 5.4pt"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 46%; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>Balance, December 31, 2014</b></font></td><td style="width: 5%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">2,659,417</td><td style="width: 1%; text-align: left"> </td><td style="width: 5%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">1.83</td><td style="width: 1%; text-align: left"> </td><td style="width: 5%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">4.15</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-left: 5.4pt">  Issued</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">86,730,975</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.54</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4.52</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 5.4pt">  Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(29,639,995</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.25</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">  Extinguished or expired</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(203,900</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2.39</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>Balance, September 30, 2015 </b></font></td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">59,546,497</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">0.68</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4.47</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">Stock
Compensation Plan</font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></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"><font style="font: 10pt Times New Roman, Times, Serif">During
the nine months ended September 30, 2015 the Company granted 400,000 stock options with a weighted average exercise price of $0.17.
The fair value of the options was estimated to be $62,000 or $0.16. The weighted average inputs used to value the options were
an expected life of 5 years, volatility of 155%, risk-free interest rate of 1.54% and dividend yield of 0%.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Stock
based compensation costs of $21,000 are expected to be recognized over the next 1.4 years.</font></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"><font style="font: normal 10pt Times New Roman, Times, Serif">In
July, 2015, the Company issued 118,450 shares of common stock with a fair value of $21,913 to its counsel for legal services rendered
through January 21, 2015. </font></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"><font style="font: 10pt Times New Roman, Times, Serif">In August,
2015, the Company issued 50,000 shares of common stock with fair value of $26,474 as full settlement to a marketing consultant
for services provided to the Company in 2014 and 2015.<b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Share
purchase options</b></font></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"><font style="font: 10pt Times New Roman, Times, Serif">A
summary of the Company’s stock options as of September 30, 2015 and changes during the period is presented below:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr>
<td colspan="3" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Number of <br />Options</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Weighted Average <br />Exercise Price</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Weighted Average <br />Remaining Life</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Intrinsic Value</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 1%; text-align: left"></td><td style="width: 34%; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding at January 1, 2014</b></font></td><td style="width: 2%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">65,430</td><td style="width: 1%; text-align: left"> </td><td style="width: 4%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">18.00</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right">5.04</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">—  </td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Issued</font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Cancelled/Forfeited</font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"> </td><td style="text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding at January 1, 2015</b></font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">65,430</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">18.00</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4.04</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Issued</font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">400,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0.17</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4.39</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">182,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding at September 30, 2015 </b></font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">465,430</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">2.62</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4.23</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">182,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercisable at September 30, 2015 </b></font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">238,810</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">5.00</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4.09</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">80,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font>A
summary of the status of the Company’s unvested options as of September 30, 2015 is presented below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="3" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Number of <br />Shares</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Weighted Average <br />Grant-Date <br />Fair Value</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 1%; text-align: left"> </td><td style="width: 26%; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unvested, December 31, 2014</b></font></td><td style="width: 1%; text-align: left"> </td><td style="width: 33%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 15%; text-align: right">278</td><td style="width: 1%; text-align: left"> </td><td style="width: 4%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">18.00</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Granted</font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">400,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.16</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"> </td><td style="text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Vested</font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(173,658</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.21</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Cancelled</font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unvested, September 30, 2015</b></font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">226,620</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">0.16</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<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; background-color: white"><b><u></u></b></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><font style="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><b>NOTE
9:	SUBSEQUENT EVENTS</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1. Subsequent
to September 30, 2015, the Board of Directors approved an amendment to a consulting agreement with a board member, which increased
the consulting fee from $10,000 per month to $15,000 per month.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">2. On
November 6, 2015, the Board of Directors approved an amendment to the Company’s 2014 Omnibus Stock Ownership Plan which
provided for an increase in the number of shares reserved for issuance under the Plan by 5 million shares to 7 million shares.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">3. On
November 12, 2015, the Company entered into a new employment agreement with Dr. Glynn Wilson, the Company’s Chief Executive
Officer, President and Chairman. The initial term of the agreement ends November 11, 2017, but it will automatically be extended
for 12-months unless terminated by the Company or Dr. Wilson by written notice to the other not later than 12 months prior to
the end of such initial term.  It will thereafter be further extended for an additional 12 months after the end of each such
extended term unless terminated by the Company or Dr. Wilson by written notice no later than 90 days prior to the end of such
term, subject to early termination for cause or good reason by Dr. Wilson. Under the agreement, Dr. Wilson’s annual base
salary is to be $280,000, and he is entitled to a performance-based bonus ranging of up to 50% of his base salary based on goals
and other conditions as the Board determines on an annual basis, which may be paid in cash or equity awards as the Board determines.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In connection
with entering into the new agreement, Dr. Wilson will receive equity awards under the Company’s 2014 Omnibus Stock Ownership
Plan consisting of (i) an award of 315,000 shares of unregistered common stock, which immediately vest, and (ii) an award of stock
options to purchase 2 million shares of Company common stock, prior to November 12, 2025, for $0.__ per share (the closing price
of the common stock on November 12, 2015). One-half of the stock options will be immediately vested, and the remaining 1 million
shares will vest ratably over the following 24 months.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">4.
On November 12, 2015, the Board of Directors approved awards of stock options to acquire 150,000 shares of common stock to each
of Sherry Grisewood and Mark Reddish. All of such options are fully vested.  In addition, the Board approved awards of stock
options to four individuals (two employees and two consultants) to purchase an aggregate of 690,000 shares of common stock. Of
the options granted to the employees and consultants, 290,000 are immediately vested, and the remainder vest over periods of between
one and three years. All of the stock options have a 10-year term, and the exercise price is $0.__ per share, the closing price
of the common stock on the date of grant.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">5.
Between October 1, 2015 and November 12, 2015, holders of Series C Warrants exercised 1,728,000 of Series C
Warrants registered under our recent registration statements on Form S-1, resulting in proceeds of $864,000 to the
Company.”.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Prior
Period Reclassifications</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
expense categories of the comparable prior period have been reclassified for comparability with the September 30, 2015 presentation.
These reclassifications had no effect on previously reported net loss.</font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><font style="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><b>Note
5:	net income (loss) per share</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Basic
income (loss) per common share is computed by dividing net income by the weighted average number of common shares outstanding
during the reporting period. Diluted income per common share is computed similar to basic income per common share except that
it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised
or converted into common stock.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
following table sets forth the computation of income (loss) per share:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Three Months Ended</b><br /> <b>September 30,</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Nine Months Ended</b><br /> <b>September 30,</b></font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2015</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014 </b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2015</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: right"> </td><td> </td>
<td colspan="3" style="text-align: right"> </td><td> </td>
<td colspan="3" style="text-align: right"> </td><td> </td>
<td colspan="3" style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 40%; text-align: left">Net income (loss)</td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">2,483,988</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">(1,567,836</td><td style="width: 1%; text-align: left">)</td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">(16,943,377</td><td style="width: 1%; text-align: left">)</td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 10%; text-align: right">(30,146,586</td><td style="width: 1%; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Weighted average shares outstanding - basic</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">48,583,003</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">17,310,708</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">36,651,565</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,292,886</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Common stock warrants</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">31,959,990</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt">Common stock options</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">400,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt">Weighted average shares outstanding - diluted</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">80,944,993</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">17,310,708</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">36,651,565</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">13,292,886</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Net loss per share data: <br />Basic</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">0.05</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(0.09</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(0.46</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(2.27</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt">Diluted</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.03</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.09</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.46</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(2.27</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr>
</table>
<p style="margin: 0pt 0"></p>
<p style="margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Options,
warrants, and convertible debt outstanding were all considered anti-dilutive for the nine months ended September 30, 2015 and
2014, due to net losses.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">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: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Nine Months Ended September 30,</b></font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2015</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; text-align: left; padding-left: 5.4pt">Common stock options</td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right">465,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right">65,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Common stock warrants - equity treatment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">47,032,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">185,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 5.4pt">Common stock warrants - liability treatment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">12,514,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">49,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Convertible notes</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Potentially dilutive securities</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">60,011,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">306,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><font style="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase"><b>Note
6:	DERIVATIVE LIABILITY - WARRANTs AND DERIVATIVE LIABILITY – CONVERSION OPTION</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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 nine months ended 2015
and 2014 is as follows:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Stock Purchase Warrants</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted Average Inputs for the Period</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Date of valuation</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Nine Months Ending September 30, 2015</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Nine Months Ending September 30, 2014</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; padding-left: 5.4pt">Strike price</td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">0.13</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">5.84</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Volatility (annual)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">158.00</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">156.00</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-left: 5.4pt">Risk-free rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.63</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.07</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Contractual term (years)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4.34</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3.33</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 5.4pt">Dividend yield (per share)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0</td><td style="padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0</td><td style="padding-bottom: 1pt; text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><i> </i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><i>Financial
Assets and Liabilities Measured at Fair Value on a Recurring Basis</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><i> </i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="19" style="border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of September 30, 2015 </b></font></p></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="11" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value Measurements </b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 1</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 2</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 3</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Total</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 35%; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Derivative liability - warrants</td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"> </td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">—  </td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"> </td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">—  </td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; padding-left: 5.4pt">Total</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">7,427,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="19" style="border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of December 31, 2014</b></font></p></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="11" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value Measurements </b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 1</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 2</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Level 3</b></font></td><td> </td>
<td colspan="3" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b>Total</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 35%; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Derivative liability - warrants</td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"> </td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">—  </td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"> </td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">—  </td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; padding-left: 5.4pt">Total</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">9,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There were no transfers between Level
1, 2 or 3 during the nine months ended September 30, 2015. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table presents changes in Level 3 liabilities
measured at fair value for the nine months ended September 30, 2015:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">Derivative liability – warrants</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%; padding-left: 5.4pt">Balance – December 31, 2014</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">9,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Additions during the period</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,659,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Change in fair value of warrant liability</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,760,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; padding-left: 5.4pt">Balance – September 30, 2015</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">7,428,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During
2014 the Company entered into numerous extinguishment agreements with various convertible note 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:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Conversion Option</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted Average Inputs for the Period</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Date of valuation</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Quarter Ending September 30, 2015</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right; border-bottom: Black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>For the Quarter Ending September 30, 2014</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; padding-left: 5.4pt">Strike price</td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">—  </td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">1.03</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Volatility (annual)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">199.00</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-left: 5.4pt">Risk-free rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.05</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Contractual term (years)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.24</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 5.4pt">Dividend yield (per share)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Fair value of Conversion Option at extinguishment</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">708,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><font style="font-family: Times New Roman, Times, Serif; text-transform: uppercase">Note
8:	Capital Stock</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><b> </b></font></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"><font style="font-family: Times New Roman, Times, Serif">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:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
<td style="width: 48%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"><b>Share
Purchase Warrants</b></font></td>
<td style="width: 13%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="width: 12%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="width: 26%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-family: Times New Roman, Times, Serif"><b>Weighted
Average Inputs</b></font></td>
<td style="width: 1%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr>
<tr>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"><b>Date
of valuation</b></font></td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-family: Times New Roman, Times, Serif"><b>May
28, 2015</b></font></td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">Strike
price</font></td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-family: Times New Roman, Times, Serif">$
0.40 – 1.00</font></td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: White">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">Volatility
(annual)</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-family: Times New Roman, Times, Serif">127.00
– 155.00</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">%</font></td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">Risk-free rate</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-family: Times New Roman, Times, Serif">.01
- 1.51</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">%</font></td></tr>
<tr style="background-color: White">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">Contractual
term (years)</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-family: Times New Roman, Times, Serif">.13
- 4.79</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">Dividend
yield (per share)</font></td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-family: Times New Roman, Times, Serif">0</font></td>
<td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">%</font></td></tr>
</table>
<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">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>
<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 style="width: 48%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Share Purchase Warrants</b></td>
<td style="width: 13%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 12%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 25%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><b>Weighted Average Inputs</b></td>
<td style="width: 2%; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><b>Date of valuation</b></td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: 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; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Strike price</td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$ 0.20 – 0.50</td>
<td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="background-color: White">
<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></tr>
<tr style="background-color: rgb(204,238,255)">
<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></tr>
<tr style="background-color: White">
<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></tr>
<tr style="background-color: rgb(204,238,255)">
<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></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"> </font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif">Share
Purchase Warrants</font></p>
<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif">During
the nine months ended September 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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif">During
the nine months ended September 30, 2015, warrant holders exercised 24,639,995 of Series B warrants at $0.20 per warrant for a
total of $4,928,000.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif">A
summary of the Company’s share purchase warrants as of September 30, 2015 and changes during the period is presented below:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-family: Times New Roman, Times, Serif">Number
of <br />Warrants</font></td><td style="padding-bottom: 1pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-family: Times New Roman, Times, Serif">Weighted
Average <br />Exercise Price</font></td><td style="padding-bottom: 1pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-family: Times New Roman, Times, Serif">Weighted
Average <br />Remaining Life</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: center; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 46%; font-weight: bold; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">Balance,
December 31, 2014</font></td><td style="width: 5%"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="width: 11%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2,659,417</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="width: 5%"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="width: 11%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">1.83</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="width: 5%"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="width: 11%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">4.15</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">  Issued</font></td><td><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font-family: Times New Roman, Times, Serif">86,730,975</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font-family: Times New Roman, Times, Serif">0.54</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font-family: Times New Roman, Times, Serif">4.52</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">  Exercised</font></td><td><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font-family: Times New Roman, Times, Serif">(29,639,995</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif">)</font></td><td><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font-family: Times New Roman, Times, Serif">0.25</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="text-align: right"><font style="font-family: Times New Roman, Times, Serif">—  </font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">  Extinguished
or expired</font></td><td style="padding-bottom: 1pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">(203,900</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2.39</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">—  </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; padding-bottom: 1pt; padding-left: 5.4pt"><font style="font-family: Times New Roman, Times, Serif">Balance,
September 30, 2015</font></td><td style="padding-bottom: 1pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">59,546,497</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">0.68</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font-family: Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">4.47</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Share
purchase options</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">A
summary of the Company’s stock options as of September 30, 2015 and changes during the period is presented below:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="3" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Number of <br />Options</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Weighted Average <br />Exercise Price</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Weighted Average <br />Remaining Life</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Intrinsic Value</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 1%; text-align: left"> </td><td style="width: 26%; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding at January 1, 2014</b></font></td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">65,430</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">18.00</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">5.04</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">—  </td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Issued</font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Cancelled/Forfeited</font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"> </td><td style="text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding at January 1, 2015</b></font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">65,430</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">18.00</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4.04</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Issued</font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">400,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0.17</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4.39</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">182,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding at September 30, 2015 </b></font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">465,430</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">2.62</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4.23</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">182,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercisable at September 30, 2015 </b></font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">238,810</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">5.00</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4.09</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">80,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">A
summary of the status of the Company’s unvested options as of September 30, 2015 is presented below:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="3" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Number of <br />Shares</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Weighted Average <br />Grant-Date <br />Fair Value</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 1%; text-align: left"> </td><td style="width: 40%; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unvested, December 31, 2014</b></font></td><td style="width: 1%; text-align: left"> </td><td style="width: 19%"> </td>
<td style="width: 2%; text-align: left"> </td><td style="width: 14%; text-align: right">278</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 17%; text-align: right">18.00</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Granted</font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">400,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.16</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"> </td><td style="text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Vested</font></td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(173,658</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.21</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">  Cancelled</font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unvested, September 30, 2015</b></font></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">226,620</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">0.16</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p>
6087016
141944
48589
613645
138286
82504
6225302
224448
874628
693362
492365
492365
7426684
9415
52942
52942
8846619
1248084
62891
20319
100568900
85265776
-103253108
-86309731
6225302
224448
-1383709
-3904186
-2976681
-1737978
32500
1579754
77500
769219
1351209
2324432
2899181
968759
1383709
3904186
2976681
1737978
-492296
-74062
-4759269
243475
4246663
-1564864
-16943377
-30143821
2483988
2972
2765
8256000
-94640
-26837837
-1567836
-16943377
-30146586
2483988
-775
-24697
-24697
-0.09
-0.46
-2.27
0.03
-0.09
-0.46
-2.27
0.05
17310708
36651565
13292886
80944993
17310708
36651565
13292886
48585003
261805
1265625
26837837
4759269
-243475
204956
291359
-55782
-15000
-3492432
-1517944
5945072
565056
708000
369000
210000
42000
3797000
476000
22000
683000
7427998
500
9437504
2083000
24697
492296
-15000
6087000
31959990
400000
465000
65000
47032000
185000
12514000
49000
7000
60011000
306000
2659000
4760000
7428000
-29639995
-203900
2.39
0.68
P4Y5M19D
P4Y6M7D
238810
5.00
182000
80000
-173658
P4Y1M2D
24639995
20318816
62890763
21913
118
21795
118450
12363447
-2090000
-2090000
7427998
29640
7398358
7688000
7688000
29639990
26474
50
26424
261806
402
261404
400110
49950
454000
15425
83247
-2009506
-2097500
59546497
2659417
64618762