Events subsequent to June 30, 2016 have been evaluated through the date these financial statements were issued, to determine whether they should be disclosed to keep the financial statements from being misleading. The following events have occurred since June 30, 2016.

Financings:

Subsequent to June 30, 2016, the Company issued multiple Notes and Note Warrants pursuant to the Second Amended Note and Warrant Purchase Agreement to accredited investor of the Company as follows:

Litigation Settlement:

On August 8, 2016, the Company entered into a Settlement Agreement and Mutual General Release (“Settlement Agreement”) with Leonard Brandt, Brandt Ventures, GP. The Settlement Agreement is a mutual release of all complaints described in the litigation section of Note 8. Commitments and Contingent Liabilities, including actions against SAIL Venture Partners (SAIL) and David Jones, a former director and Chairman of the Company and former SAIL partner. The Settlement Agreement terms include a cash payment of $225,000 to be paid no later than August 25, 2016, along with the issuance of a $50,000 Note convertible into 1,000,000 shares of Common Stock at $0.05 per share and a Note Warrant for the purchase of 1,000,000 shares at $0.05 per share. The terms of the Note and the Warrant are substantially the same as the Notes and Warrants issued pursuant to the Second Amended Note and Warrant Purchase Agreement described in Note 3. Convertible Debt and Equity Financing.