On February 8, interest payable to the Senior Secured Note on December 27, 2012 was extended through February 15, 2012.

The Employment Agreement, dated December 28, 2011, with the Company’s Chief Executive Officer Peter Adderton, and the Executive Chairman Agreement, dated December 28, 2011, with Mr. Robert Ellin, each provided for a one year term and therefore expired naturally on December 28, 2012 in accordance with their respective terms. Mr. Adderton and Mr. Ellin continue to serve the Company in the same offices and capacities, and for the same cash compensation and benefits as they were receiving under their respective agreements.

On January 28, 2013 and February 4, 2013, the Company entered into two Equity Financing Binding Term Sheets, dated as of January 20, 2013 and January 25, 2013, respectively (the “Equity Agreements”), with accredited investors, pursuant to which the Company agreed to issue an aggregate of 785,714 shares of its common stock and warrants to purchase 196,429 shares of its common stock (subject to adjustment), for an aggregate purchase price of $550,000. The warrants have an exercise price of $0.70 per share (subject to adjustment) and a five year term. The closing of the transactions contemplated by the Equity Agreement occurred on January 28, 2013 and February 4, 2013, respectively.

Management evaluated subsequent events after the balance sheet date of December 31, 2012 through the date these unaudited financial statements were issued and concluded that no other material subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements.