On October 16, 2013, pursuant to a vote of the shareholders on record as of September 3, 2013, the number of authorized shares of common stock was increased to 700,000,000.

On October 18, 2013, the Company exchanged 380,952 warrants to purchase common stock issued to various parties associated with National Securities as part of the Hillair debenture issuance for shares of restricted common stock of the Company on a one for one basis with no exchange of cash.

On October 25, 2013, the board of directors granted five officers and employees 1,000,000 shares each and one director 500,000 shares of restricted common stock as a bonus for service to the Company.

On October 29, 2013, the Company executed new two year employment agreements with Messrs. Klaus Moeller, Howard Balaban and Larry Balaban, with an effective date of October 1, 2013, whereby the employees agreed to a reduction of salary. Each named employee will receive (i) an annual salary of $20,800 (except that if the Company generates cash flow from operations of at least $300,000 on an annual basis, the annual salary shall be $100,000 plus an additional payment of $75,000 per annum, payable in cash or shares of the Company’s common stock in quarterly installments of $18,750 each, and (ii) the acceleration of vesting of all previously issued option grants to Mr. Moeller under the Company’s 2008 Stock Option Plan as well as participation in other Company benefit plans and the ability to receive a year-end performance bonus, at the discretion of the Company’s Board of Directors. In the event employment is terminated by the Company without “Cause” as defined in the agreement, the employee shall be entitled to severance payments for twelve months, based on the annual salary rate of $100,000. Mr. Moeller shall be employed as Chief Executive Officer and each of Messrs. Balaban will have the title Vice-President. Additional information regarding Mr. Moeller’s agreement is available on the Form 8-K filed on October 30, 2013.

On October 29, 2013, the Company and Ms. Morgan’s agreed to execute a new employment agreement, effective October 1, 2013, whereby Ms. Morgan shall continue to serve as the Company’s Chief Financial Officer for a period of two years in consideration for (i) a reduction in annual salary to $175,000 and (ii) the acceleration of vesting of all previously issued option grants to Ms. Morgan under the Company’s 2008 Stock Option Plan as well as participation in other Company benefit plans and the ability to receive a year-end performance bonus, at the discretion of the Company’s Board of Directors. In the event Ms. Morgan’s employment is terminated by the Company without “Cause” (as defined in the Morgan Employment Agreement), Ms. Morgan shall be entitled to severance payments for twelve months. Additional information regarding Mr. Moeller’s agreement is available on the Form 8-K filed on October 30, 2013.

On October 30, 2013, the Company issued 1,002,000 shares of restricted common stock in exchange for services valued at $50,100, or $0.05 per share.

On November 8, 4,320,607 shares of restricted common stock were issued in full payment of a note payable, originally issued on March 31, 2011, with a principal amount of $159,752.54 and accrued but unpaid interest in the amount of $56,277.79. See Note 5: Notes Payable – Related Parties for additional information.

On November 8, 2013, the Company issued 1,000,000 shares restricted common stock to a director as a bonus for service to the Company.