Contract

false 2014-06-13 S-1 0001497647 Smaller Reporting Company Grilled Cheese Truck, Inc. 25262 In the event that the Company's Common Stock is listed for quotation and begins trading, and within 18 months of the initial trading date the Company's Common Stock exceeds $5.00 per share for a period of 20 consecutive trading days, the Company will issue the Clark Group warrants to purchase 700,000 shares of the Company's Common Stock. The warrants will have an exercise price of $2.00, contain cashless exercise provisions, and be exercisable for a period of three years from the date of granting such warrants. The Amended Lee Agreement also includes additional warrant consideration. In the event that the Company's Common Stock is listed for quotation and begins trading, and within 18 months of the initial trading date the Company's Common Stock exceeds $5.00 per share for a period of 20 consecutive trading days, the Company will issue Mr. Lee warrants to purchase 700,000 shares of the Company's Common Stock. The warrants will have an exercise price of $2.00, contain cashless exercise provisions, and be exercisable for a period of three years from the date of granting such warrants. The agreement also includes additional warrant consideration. In the event that the Company's Common Stock is listed for quotation and begins trading, and within 18 months of the initial trading date the Company's Common Stock exceeds $5.00 per share for a period of 20 consecutive trading days, the Company will issue the Mr. Goldstein warrants to purchase 700,000 shares of the Company's Common Stock. The warrants will have an exercise price of $2.00, contain cashless exercise provisions, and be exercisable for a period of three years from the date of granting such warrants. Further, in the event Devaraj introduces the Company to a prospective party that results in the Company entering into a licensing agreement or franchise agreement, Devaraj shall receive a (a) 5% commission on the first year of the license or franchise fee paid to the Company, (b) 4.5% commission on the second year of the license or franchise fee paid to the Company, (c) 4% commission on the third year of the license or franchise fee paid to the Company, (d) 3.5% commission on the fourth year of the license or franchise fee paid to the Company, (e) 3% commission on the fifth year of the license or franchise fee paid to the Company, and (f) 2.5% commission for the remainder of the term of the license or franchise agreement. 89743 79186 89743 79186 128993 128993 2012-07-16 2012-07-16 2012-07-16 2012-08-15 2012-07-16 2012-10-18 2013-09-06 2013-09-06 2013-09-06 2013-08-08 2013-08-13 2013-08-08 2013-09-12 2012-04-12 2012-06-15 2012-07-16 2012-08-15 177244 335256 172921 339579 100000 8000 8000 200000 240000 67200 120000 150000 240000 180000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> <strong>17.&nbsp;&nbsp;&nbsp;Asset Purchase Agreements</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, the Company entered into an Asset Purchase Agreement (the "Asset Purchase Agreement"), by and among Hook &amp; Ladder Draught House, LLC, a Texas limited liability company ("HL"), KOW Leasing Co., LLC, a Texas limited liability company ("KOW"), Mr. Devaraj, as sole member of HL and KOW, respectively ("Mr. Devaraj" together with HL and KOW, the "Sellers"), the Company and GCT Texas Master, LLC, a Nevada limited liability company and a licensee of the Company ("GCT-TX", together with the Company, the "Buyer").&nbsp; HL is a mobile food service business that provides food and alcohol out of renovated fire engines.&nbsp; Pursuant to the Asset Purchase Agreement, the Company agreed to purchase substantially all of the Seller&#39;s rights, title and interests in and to certain assets, properties and rights of every kind, nature and description, tangible and intangible, real, personal or mixed, accrued and contingent, which are owned or leased by Sellers and used in the Seller&#39;s business, including but not limited to all equipment, customer contracts, property leases, intellectual property, vehicles, books and records, licenses and corporate and trade names.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> As consideration for the Seller to enter into the Asset Purchase Agreement, the Company agreed to: (i) issue to Sellers 500,000 shares of the Company&#39;s common stock, par value $0.001 per share (the "Common Stock"), and (ii) issue a warrant to Sellers to purchase up to 250,000 shares of Common Stock (the "HL Warrant").&nbsp; The 500,000 shares of Common Stock issued to the Sellers under the Asset Purchase Agreement are subject to customary piggy-back registration rights and were valued at $1.00 per share. The HL Warrant is exercisable at a price of $1.00 per share (see Note 9), contains customary piggyback registration rights and shall be exercisable for a period of three (3) years. In total the value of the common shares issued were $500,000 and the value of the warrants issued were $128,993 for total consideration of $628,993.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The assets purchased were fixed assets of equipment and vehicles totaling $543,439, which initially were recorded at the carrying value, which at the time the Company estimated to approximate their fair market value and intellectual property valued at $138,944. The fair value allocation of intellectual property is based on management estimates. At December 31, 2013, the Company determined a full impairment of the identifiable intellectual property, including but not limited to all customer contracts, property leases, intellectual property, vehicles, books and records, licenses and corporate and trade names, was necessary. In addition the Company assumed a liability totaling $53,390 for a finance arrangement relating to the purchase of a vehicle which it sold in January 2014 (see Note 6).</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company also agreed to appoint Mr. Devaraj to the Company&#39;s Board, and, for&nbsp;so long as Mr. Devaraj holds any shares of Common Stock,&nbsp;the Board shall take all reasonable actions such that Mr. Devaraj shall be nominated to serve as a member of the Board. Additionally, the Company entered into an employment agreement with Mr. Devaraj, whereby Mr. Devaraj will be employed by the Company as the Director of Business Development for a period of three (3) years.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, Hook &amp; Ladder Draught House, LLC and KOW Leasing Co., LLC, (assignors) and the Company (assignee) entered into assignment agreement to ensure that all the intellectual property subject of the Asset Purchase Agreement is properly transferred to assignee.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, Hook &amp; Ladder Draught House, LLC (assignor) and the Company (assignee) entered into assignment and assumption of sublease agreement to assign and transfer to assignee all of right, title and interest in tenant under sublease. Assignor is the holder of tenant&#39;s interest in that certain sublease dated as of March 1, 2013 between KOW Leasing Co., LLC as landlord and assignor as a tenant.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, KOW Leasing Co., LLC (assignor) and the Company (assignee) entered into assignment and assumption of lease agreement to assign and transfer to assignee all of right, title and interest as tenant in lease and desires to succeed to the interest of assignor under the lease and to assume the obligation of assignor. Assignor is the holder of tenant&#39;s interest in that certain lease dated as of May 17, 2012 between Southern Methodist University as landlord and assignor as a tenant.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <font style="COLOR: #222222; BACKGROUND-COLOR: white">On November 13, 2013, the Company and AFT closed (the "AFT Closing") the transactions contemplated by the Asset Sale Agreement. At the AFT Closing, the Company transferred to AFT certain intellectual property that was developed and owned by KOW, which was part of the assets purchased by the Company from KOW pursuant to that certain Asset Purchase Agreement, dated August 8, 2013, between the Company, KOW, HL and Mr. Devaraj. The Company sold to AFT one domain name,&nbsp;</font> <font style="BACKGROUND-COLOR: white">hookandladder.biz<font style="COLOR: #222222">, which had nominal value and did not include any of the other intellectual property acquired on August 8, 2013 by the Company.&nbsp;The domain name was carried on the Company&#39;s balance sheet at $-0-. In consideration, AFT paid the Company a final cash payment of $250,000, for total consideration of $450,000 and issued to the Company membership interests equal to a twenty percent (20%) interest of the issued and outstanding membership interests in AFT. In addition, at Closing, the Company and AFT agreed to entered into a truck rental lease agreement pursuant to which AFT shall lease to the Company, franchise or licensed operators of the Seller, One Hundred (100) new Food trucks, at prevailing market rates and on such other terms and conditions as substantially set forth in the Truck Rental Lease Agreement (the "<em><u>Truck Rental Agreement</u></em>"), in accordance with the lease commencement schedule as follows: (i) Twenty (20) trucks on or before&nbsp;March 31, 2014; and (ii) a minimum of Ten (10) trucks per month after&nbsp;March 31, 2014. The Company recorded the full $450,000 as a deferred sale. AFT has yet to deliver any of the twenty trucks agreed to be leased by the Company from AFT before March 31, 2014.&nbsp; Accordingly, the Company has not recognized the $450,000 and is still evaluating the accounting treatment as it fulfills its remaining obligation to lease these trucks.</font></font>&nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0.25in; TEXT-ALIGN: left"> <strong>15.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Asset Purchase Agreements</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, the Company entered into an Asset Purchase Agreement (the "Asset Purchase Agreement"), by and among Hook &amp; Ladder Draught House, LLC, a Texas limited liability company ("HL"), KOW Leasing Co., LLC, a Texas limited liability company ("KOW"), Mr. Devaraj, as sole member of HL and KOW, respectively ("Mr. Devaraj" together with HL and KOW, the "Sellers"), the Company and GCT Texas Master, LLC, a Nevada limited liability company and a licensee of the Company ("GCT-TX", together with the Company, the "Buyer").&nbsp; HL is a mobile food service business that provides food and alcohol out of renovated fire engines.&nbsp; Pursuant to the Asset Purchase Agreement, the Company agreed to purchase substantially all of the Seller&#39;s rights, title and interests in and to certain assets, properties and rights of every kind, nature and description, tangible and intangible, real, personal or mixed, accrued and contingent, which are owned or leased by Sellers and used in the Seller&#39;s business, including but not limited to all equipment, customer contracts, property leases, intellectual property, vehicles, books and records, licenses and corporate and trade names.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> As consideration for the Seller to enter into the Asset Purchase Agreement, the Company agreed to: (i) issue to Sellers 500,000 shares of the Company&#39;s Common Stock, and (ii) issue a warrant to Sellers to purchase up to 250,000 shares of Common Stock (the "HL Warrant").&nbsp; The 500,000 shares of Common Stock issued to the Sellers under the Asset Purchase Agreement are subject to customary piggy-back registration rights and were valued at $1.00 per share. The HL Warrant is exercisable at a price of $1.00 per share, contains customary piggyback registration rights and shall be exercisable for a period of three (3) years. In total the value of the common shares issued were $500,000 and the value of the warrants issued were $128,993 for total consideration of $628,993.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The assets purchased were fixed assets of equipment and vehicles totaling $543,439, which initially were recorded at the carrying value, which at the time the Company estimated to approximate their fair market value and intellectual property valued at $138,944. The fair value allocation of intellectual property is based on management estimates. At December 31, 2013, the Company determined a full impairment of the identifiable intellectual property, including but not limited to all customer contracts, property leases, intellectual property, vehicles, books and records, licenses and corporate and trade names, was necessary. In addition the Company assumed a liability totaling $53,390 for a finance arrangement relating to the purchase of a vehicle which it sold in January 2014 (see Note 6).</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company also agreed to appoint Mr. Devaraj to the Company&#39;s Board, and, for&nbsp;so long as Mr. Devaraj holds any shares of Common Stock,&nbsp;the Board shall take all reasonable actions such that Mr. Devaraj shall be nominated to serve as a member of the Board. Additionally, the Company entered into an employment agreement with Mr. Devaraj, whereby Mr. Devaraj will be employed by the Company as the Director of Business Development for a period of three (3) years.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, HL and KOW (assignors) and the Company (assignee) entered into assignment agreement to ensure that all the intellectual property subject of the Asset Purchase Agreement is properly transferred to assignee.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, H&amp;L (assignor) and the Company (assignee) entered into assignment and assumption of sublease agreement to assign and transfer to assignee all of right, title and interest in tenant under sublease. Assignor is the holder of tenant&#39;s interest in that certain sublease dated as of March 1, 2013 between KOW as landlord and assignor as a tenant.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, KOW (assignor) and the Company (assignee) entered into assignment and assumption of lease agreement to assign and transfer to assignee all of right, title and interest as tenant in lease and desires to succeed to the interest of assignor under the lease and to assume the obligation of assignor. Assignor is the holder of tenant&#39;s interest in that certain lease dated as of May 17, 2012 between Southern Methodist University as landlord and assignor as a tenant.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-FAMILY: Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-ALIGN: justify"> On November 13, 2013, the Company and AFT closed (the "AFT Closing") the transactions contemplated by the Asset Sale Agreement. At the AFT Closing, the Company transferred to AFT certain intellectual property that was developed and owned by KOW, which was part of the assets purchased by the Company from KOW pursuant to that certain Asset Purchase Agreement, dated August 8, 2013, between the Company, KOW, HL and Mr. Devaraj. The Company sold to AFT one domain name, hookandladder.biz, which had nominal value and did not include any of the other intellectual property acquired on August 8, 2013 by the Company.&nbsp;The domain name was carried on the Company&#39;s balance sheet at $-0-. In consideration, AFT paid the Company an aggregate cash payment of $450,000 and issued to the Company membership interests equal to a twenty percent (20%) interest of the issued and outstanding membership interests in AFT. In addition, at the AFT Closing, the Company and AFT agreed to entered into a truck rental lease agreement pursuant to which AFT shall lease to the Company, franchise or licensed operators of the Seller, One Hundred (100) new Food trucks, at prevailing market rates and on such other terms and conditions as substantially set forth in the Truck Rental Lease Agreement (the " <em><u>Truck Rental Agreement</u></em> "), in accordance with the lease commencement schedule as follows: (i) Twenty (20) trucks on or before&nbsp;March 31, 2014; and (ii) a minimum of Ten (10) trucks per month after&nbsp;March 31, 2014. The Company recorded the full $450,000 as a deferred sale. AFT has yet to deliver any of the twenty trucks agreed to be leased by the Company from AFT before March 31, 2014.&nbsp; Accordingly, the Company has not recognized the $450,000 and is still evaluating the accounting treatment as it fulfills its remaining obligation to lease these trucks. &nbsp;</p> <!--EndFragment--></div> </div> 682383 150000 150000 150000 500000 500000 500000 100000 100000 100000 40000 100000 100000 P5Y P5Y P3Y P3Y P3Y P3Y P3Y 612500 52545 42852 14002 42852 14002 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"><strong>7.</strong></td> <td><strong>Convertible&nbsp;Notes</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>a.</strong></td> <td><strong>Pre-Reverse Merger Convertible Debt</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> At December 31, 2013 and 2012 pre-reverse merger convertible debentures consisted of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December<br /> 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December<br /> 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2012</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: right" colspan="2">&nbsp;</td> <td>&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 70%; TEXT-ALIGN: left">Convertible notes payable</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">-</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">512,500</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Unamortized debt discount</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (172,921</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 2.5pt">Total</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 339,579</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> Prior to reverse merger and closing of the private placement as discussed below, the Company entered into convertible loans with third party non-affiliates in which $312,500 was received in cash and 400,000 common shares were converted into convertible notes payable valued at $200,000. These loans were convertible at a rate of 33 1/3% of the private placement share price. As a result, the Company recorded $512,500 in debt discount related to the beneficial conversion feature. In connection with these debentures, the Company has recorded amortization expense amounting to $177,244 (pre reverse merger) and $335,256 (post reverse merger) with $0 net of discount balance remaining. During the year ended December 31, 2013 and 2012, the Company charged to operations amortization of debt discount of $172,921 and $339,579, respectively. In May 2013, the Company issued 1,696,833 shares of its Common Stock valued at $0.333 per share as a result of converting $512,500 of principal and $52,545 of interest of its pre reverse merger convertible note holders.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> Interest expense recorded on the notes for the year ended December 31, 2013 and 2012 amounted to $32,040 and $15,717, respectively.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>b.</strong></td> <td><strong>Post-Reverse Merger Convertible Debt</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> At December 31, 2013 and December 31, 2012 post-reverse merger convertible debentures consisted of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td style="FONT-WEIGHT: bold">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2"> December<br /> 31,</td> <td style="FONT-WEIGHT: bold">&nbsp;</td> <td style="FONT-WEIGHT: bold">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2"> December<br /> 31,</td> <td style="FONT-WEIGHT: bold">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2">2012</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: right" colspan="2">&nbsp;</td> <td>&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 70%; TEXT-ALIGN: left">Convertible notes payable</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">1,650,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Unamortized debt discount</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (115,508</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (74,411</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 2.5pt">Total</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,404,492</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,575,589</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> <em>Private Placement Notes</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On October 18, 2012, the Company completed an initial closing (the "Initial Closing") of a "best efforts" private offering of up to $5,000,000 (the "2012 Private Placement Offering") of Units (as defined below) with a group of accredited investors (the "Purchasers") for total gross proceeds to us of $1,050,000. During November 2012 and December 2012, the Company raised additional proceeds of $600,000. During 2013, the Company raised additional proceeds of $1,225,000. On April 18, 2013, the Company completed the final closing of the 2012 Private Placement Offering.&nbsp;In the aggregate, the Company sold 115 Units, for aggregate gross proceeds of $2,875,000. Pursuant to a subscription agreement with the Purchasers (the "Subscription Agreement"), the Company issued to the Purchasers units consisting of (i) 10% Convertible Senior Secured Notes (the "Private Placement Notes") and (ii) warrants to purchase shares (the "Private Placement Warrants") of our Common Stock at an exercise price of $2.00 per share. Each Unit consists of a Private Placement Note, in the principal face amount of $25,000, and Private Placement Warrants to purchase 12,500 shares of common stock (the "Units").</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On June 21, 2013, the Company completed its final closing of a "best efforts" private offering of up to $2,000,000 (the "2013 Private Placement Offering") of Private Placement Units (such Private Placement Units being identical to the Private Placement Units issued in the 2012 Private Placement Offering) with a group of accredited investors (the "2013 Private Placement Purchasers") for total aggregate gross proceeds of $645,000. Pursuant to a subscription agreement with the 2013 Private Placement Purchasers (the "2013 Private Placement Subscription Agreement"), the Company issued to the 2013 Private Placement Purchasers units consisting of (i) 10% Convertible Senior Secured Notes (these notes mirror the Private Placement Notes) and (ii) warrants (these warrants mirror the Private Placement Warrants) to purchase shares of Common Stock at an exercise price of $2.00 per share. The Private Placement Units each consisted of a Private Placement Note, in the principal face amount of $25,000, and Private Placement Warrants to purchase 12,500 shares of common stock.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> The Private Placement Notes accrue interest at a rate of 10% on the aggregate principal amount, payable on the third anniversary of the issue date (the "Maturity Date") if not converted prior to the Maturity Date. The Private Placement Notes are subject to (i) an optional conversion into shares of the Company&#39;s Common Stock at the note holder&#39;s election following the date upon which the Company&#39;s Registration Statement (as defined in the 2012 Private Placement Offering documents) is declared effective with the SEC or (ii) a mandatory conversion thirty-six (36) months from the date of issuance. The shares of Common Stock issuable upon conversion of the Private Placement Notes shall equal: (i) the principal amount of the Private Placement Note and the accrued interest thereon (assuming the Company elects to pay the interest in shares of Common Stock) divided by (ii) $1.00.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> <em>Warrants</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> The Private Placement Warrants are exercisable for an aggregate of 1,760,000 shares of the Company&#39;s Common Stock as of December 31, 2013. The Private Placement Warrants are exercisable for a period of three years from the original issue date. The exercise price with respect to the Warrants is $2.00 per share.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> The Company accounts for the warrant valuation in accordance with FASB ASC 470-20, Debt with Conversion and Other Options. The Company records the fair value of warrants issued in connection with those instruments. The discount recorded in connection with the warrant valuation is recognized as non-cash interest expense and is amortized over the term of the convertible note. The Company recorded to additional paid in capital and debt discount against notes $89,743 for the calculated fair value of the warrants, in conjunction with the notes issued for the year ended December 31, 2013. Amortization expense for the years ended December 31, 2013 and 2012 amounted to $48,646 and $4,774, respectively.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> <strong>Convertible Notes Payable</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> In October 2013, the Company entered into an unsecured convertible promissory note totaling $100,000 bearing interest at 10% per annum. On December 31, 2013, the Company converted the $100,000 note to 200,000 shares and $1,176 of interest to 2,353 shares at a price of $0.50 per share.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;</p> <p style="BACKGROUND-COLOR: white; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-ALIGN: justify"> The Company analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion feature was determined to be $100,000 and was recorded as debt discount. During the year ended December 31, 2013, debt discount of $100,000 was amortized upon conversion.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 0.25in"> <strong>7.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> <strong>Convertible&nbsp;Notes</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>a.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong>Pre-Reverse Merger Convertible Debt</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> During the three-month period ended March 31, 2013, the Company had certain convertible notes payable amounting to $512,500 which were outstanding during that period. The Company recorded amortization expense and interest expense of $158,805 and $15,375, respectively, in connection with such debt during the three-month period ended March 31, 2013. The obligations under such notes were satisfied in May 2013.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>b.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong>Post-Reverse Merger Convertible Debt</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> At March 31, 2014 and December 31, 2013 post-reverse merger convertible debentures consisted of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">March<br /> 31,</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">December<br /> 31,</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt" colspan="2">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right" colspan="2"> &nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Convertible notes payable</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Unamortized debt discount</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (101,174</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (115,508</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> Total</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,418,826</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,404,492</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> The post-reverse convertible debentures bear interest at 10% and mature three years from their issuance at dates ranging between October 2015 and March 2016. Such debentures are subject to (i) an optional conversion into shares of the Company&#39;s Common Stock at the note holder&#39;s election following the date upon which the Company&#39;s registration statement, as defined in the debentures, is declared effective with the SEC or (ii) a mandatory conversion thirty-six (36) months from the date of issuance. The shares of Common Stock issuable upon conversion of the debentures shall equal: (i) their principal amount and the accrued interest thereon (assuming the Company elects to pay the interest in shares of Common Stock) divided by (ii) $1.00.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> The Company generated proceeds of $374,955 from the issuance of such debentures during the three-month period ended March 31, 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> In connection with the issuance of the debt, the Company issued 187,500 warrants to the noteholders during the three-month period ended March 31, 2013. The Company accounts for the warrant valuation in accordance with FASB ASC 470-20, Debt with Conversion and Other Options. The Company records the fair value of warrants issued in connection with those instruments. The discount recorded in connection with the warrant valuation is recognized as non-cash interest expense and is amortized over the term of the convertible note. The fair value of the warrants, which amounted to $17,995 has been recognized as beneficial conversion feature and recorded as debt discount during the three-month period ended March 31, 2013. The Company recorded an amortization of debt discount in connection with all the warrants issued and outstanding at their respective measurement date, which amounted to $14,333 and $8,098 during the three-month period ended March 31, 2014 and 2013, respectively.</p> <!--EndFragment--></div> </div> 468805 194216 146478 92302 1004571 457488 389509 149294 2353 12500 52545 52545 1176 1176 0.3333 45852 250000 25000 73423 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"><strong>2.</strong></td> <td><strong>Going Concern and Basis of Presentation</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business. The business will require significant amounts of capital to sustain operations and make the investments it needs to execute its longer term business plan. The Company has cash of $42,359 and negative net working capital of $2,192,022 at December 31, 2013. The Company&#39;s cash and working capital amounts were derived from the proceeds of financing transactions in which it raised proceeds of $1,650,000 in 2012 and $2,144,000 in 2013 through the issuance of notes, convertible notes and common stock purchase warrants. The Company&#39;s net loss for the year ended December 31, 2013 was $5,612,919 and the deficit accumulated by the Company amounts to $7,916,778 as of December 31, 2013. These matters raise substantial doubt about the Company&#39;s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, additional capital resources.&nbsp;&nbsp;Management&#39;s plan to continue as a going concern includes raising capital through increased sales and conducting additional financings through debt and equity transactions.&nbsp;However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon the management&#39;s ability to successfully implement the plans described above, including securing additional sources of financing and attain profitable operations.&nbsp;&nbsp; Management also cannot provide any assurance that unforeseen circumstances that could occur at anytime within the next twelve months or thereafter will not increase the need for the Company to raise additional capital on an immediate basis. The Company is actively targeting sources of additional financing through debt and equity transactions and other transactions as described in Note 18. There can be no assurance that we will be able to continue to raise funds in which case the Company may be unable to meet its obligations.&nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0in">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; TEXT-ALIGN: left; WIDTH: 0.25in"> <strong>2.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; TEXT-ALIGN: justify"> <strong>Going Concern and Basis of Presentation</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business. The business will require significant amounts of capital to sustain operations and make the investments it needs to execute its longer term business plan. The Company has cash of $89,498 and working capital deficiency of $2.7 million at March 31, 2014. The Company has historically relied on proceeds from the issuance of debt and shares of its Common Stock to finance its operations. The Company&#39;s net loss for the three-month period ended March 31, 2014 was $1.2 million and the deficit accumulated by the Company amounts to $9.1 million as of March 31, 2014. These matters raise substantial doubt about the Company&#39;s ability to continue as a going concern. The accompanying unaudited consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, additional capital resources.&nbsp;&nbsp;Management&#39;s plan to continue as a going concern includes raising capital through increased sales and conducting additional financings through debt and equity transactions.&nbsp;However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon the management&#39;s ability to successfully implement the plans described above, including securing additional sources of financing and attain profitable operations.&nbsp;&nbsp; Management also cannot provide any assurance that unforeseen circumstances that could occur at any time within the next twelve months or thereafter will not increase the need for the Company to raise additional capital on an immediate basis. The Company is actively targeting sources of additional financing through debt and equity transactions and other transactions. There can be no assurance that we will be able to continue to raise funds in which case the Company may be unable to meet its obligations.&nbsp;</p> <!--EndFragment--></div> </div> 400 1044 383 -101 0.5 0.5 458 1502 1176 768500 422296 53390 0.06 0.06 1.00 5000000 5000000 7000 6250 10000 P18M P18M P12M P18M 2000 2000 1800 3300 1500 2192022 2700000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0px">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>9.</strong></td> <td><strong>Notes&nbsp;Payable</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Notes payable at December 31, 2013 and 2012 consists of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December<br /> 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December<br /> 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2012</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: right" colspan="2">&nbsp;</td> <td>&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 70%; TEXT-ALIGN: left">Notes payable</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">65,896</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">12,506</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less payments</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (12,506</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 2.5pt">Total</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 53,390</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 12,506</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, the Company entered into an Asset Purchase Agreement. As part of the Asset Purchase Agreement, the Company assumed a liability totaling $53,390 for a finance arrangement relating to the purchase of a vehicle (see Note 17). In January 2014, the Company sold the vehicle to pay-off the above note. As of December 31, 2013, the Company reclassified the vehicles from property and equipment to vehicles held for sale.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 0.25in"> <strong>9.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> <strong>Notes&nbsp;Payable</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Notes payable at March 31, 2014 and December 31, 2013 consists of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">March<br /> 31,</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">December<br /> 31,</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt" colspan="2">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right" colspan="2"> &nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Notes payable</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 65,986</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Less payments</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (12,506</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> Total</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 53,390</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, the Company entered into an Asset Purchase Agreement. As part of the Asset Purchase Agreement, the Company assumed a liability totaling $53,390 for a finance arrangement relating to the purchase of a vehicle (see Note 15). In January 2014, the Company sold the vehicle to pay-off the above note. As of December 31, 2013, the Company reclassified the vehicles from property and equipment to vehicles held for sale.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Notes payable at December 31, 2013 and 2012 consists of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December<br /> 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December<br /> 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2012</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: right" colspan="2">&nbsp;</td> <td>&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 70%; TEXT-ALIGN: left">Notes payable</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">65,896</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">12,506</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less payments</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (12,506</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 2.5pt">Total</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 53,390</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 12,506</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Notes payable at March 31, 2014 and December 31, 2013 consists of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">March<br /> 31,</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">December<br /> 31,</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt" colspan="2">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right" colspan="2"> &nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Notes payable</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 65,986</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Less payments</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (12,506</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> Total</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 53,390</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> 0.0325 0.0325 P30D P30D 592000 115 100000 200000 100000 100000 750000 5000000 2000000 5000000 20000 15000 1100000 40000 40000 5600 40000 40000 10000 10000 10000 20000 60000 22500 5000 1875 60000 22500 0.1 0.2 0.2 0.05 0.05 P5Y P36M P12M P24M 0.50 0.50 130000 740000 2144000 1650000 696000 37500 81500 12500 12500 8442300 24000 77390 14002 0.02 0.1 60000 22500 0.02 0.1 0.18 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>k.</em></strong></td> <td style="TEXT-ALIGN: justify"><strong><em>Sales Taxes</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company&#39;s revenues in the statements of income are net of sales taxes.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <em>&nbsp;</em></p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>k.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify; WIDTH: 94%"> <strong><em>Sales Taxes</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company&#39;s revenues in the statements of income are net of sales taxes.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <em>&nbsp;</em></p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 75%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt; WIDTH: 50%">Computers</td> <td style="FONT-SIZE: 10pt; WIDTH: 50%">4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt">Vehicles</td> <td style="FONT-SIZE: 10pt">4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt">Office Equipment</td> <td style="FONT-SIZE: 10pt">7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt">Food Service Equipment</td> <td style="FONT-SIZE: 10pt">7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt">Furniture and Fixtures</td> <td style="FONT-SIZE: 10pt">7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt">Leasehold Improvements</td> <td style="FONT-SIZE: 10pt">7 Years</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 9%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 46%"> Computers</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 45%"> 4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Vehicles</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Office Equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Food Service Equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Furniture and Fixtures</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Leasehold Improvements</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> </table> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The following table summarizes the changes in warrants outstanding and related prices for the shares of the Company&#39;s Common Stock issued to shareholders at December 31, 2013:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Exercise<br /> Price</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Number<br /> Outstanding</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Warrants&nbsp;Outstanding<br /> Weighted&nbsp;Average<br /> Remaining&nbsp;Contractual<br /> Life&nbsp;(years)</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Weighted<br /> Average<br /> Exercise&nbsp;price</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Number<br /> Exercisable</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Warrants&nbsp;Exercisable<br /> Weighted<br /> Average<br /> Exercise&nbsp;Price</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right; WIDTH: 14%"> 1.00-2.50</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 14%; TEXT-ALIGN: right">4,866,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 14%; TEXT-ALIGN: right">2.88</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 14%; TEXT-ALIGN: right">1.89</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 14%; TEXT-ALIGN: right">4,866,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 13%; TEXT-ALIGN: right">1.89</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The fair value of these warrants issued and the significant assumptions used to determine those fair values, using a Black-Scholes option-pricing model are as follows:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt"> <strong>Significant&nbsp;assumptions:</strong></td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td colspan="2">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Risk-free interest rate at grant date</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">0.60%-0.91</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 85%; TEXT-ALIGN: left">Expected stock price volatility</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">80.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Expected dividend payout</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Expected option life-years</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">(a)</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in">(a)</td> <td>All warrants issued expire in 3-5 years. The remaining life of the warrants is 2.88 years.</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The fair value of these warrants issued and the significant assumptions used to determine those fair values, using a Black-Scholes option-pricing model are as follows:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; FONT: bold 10pt Times New Roman, Times, Serif"> Significant&nbsp;assumptions:</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt" colspan="2">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Risk-free interest rate at grant date</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; TEXT-ALIGN: right"> 0.60%-0.85</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> %</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Expected stock price volatility</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 80.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> %</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Expected dividend payout</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Expected option life-years</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; TEXT-ALIGN: right"> (a)</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> (a)</td> <td style="WIDTH: 94%; PADDING-RIGHT: 0.8pt"><font style="FONT: 10pt Times New Roman, Times, Serif">All warrants issued expire in 3-5 years.</font> </td> </tr> </table> <!--EndFragment--></div> </div> 2.00 1.89 2.00 2.00 1.74 2.00 3.00 4.00 5.00 2.00 3.00 4.00 5.00 1.89 1.00 4866000 4866000 1.89 P2Y10M17D 2.50 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"><strong>12.</strong></td> <td><strong>Share&nbsp;Exchange</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On October 18, 2012, the Company entered into the Exchange Agreement by and among (i) the Company, (ii) Grilled Cheese, (iii) GCT Sub; (iv) the Majority Shareholder and (v) the Minority Shareholder. Pursuant to the terms of the Exchange Agreement: (1) the Majority Shareholder transferred to GCT Sub all of the shares of Grilled Cheese held by such shareholder in exchange for the issuance of 4,275,000 shares of Common Stock; and (2) the Minority Shareholder transferred all of the shares of Grilled Cheese held by the Minority Shareholder in exchange for $500,000 and 845,000 shares of Common Stock.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The issuance of the Company&#39;s Common Stock to the Majority Shareholder and Minority Shareholder as well as the payment of $500,000 to the Minority Shareholder was accounted for as a recapitalization rather than a business combination. The $500,000 cash payment was recorded as a reduction of additional paid-in-capital during the 4th quarter of 2012.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em>Grant Registration Rights Agreement</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In conjunction with the Share Exchange Transaction, the Company and the Minority Shareholder entered into a registration rights agreement ("Grant Registration Rights Agreement"). Pursuant to the Grant Registration Rights Agreement, the Company will register the 845,000 shares issued to the Minority Shareholder in the Share Exchange Transaction on any registration statement that the Company files in conjunction with the Private Placement Offering. On November 19, 2012 Michele Grant sold and assigned her rights and interest to the 845,000 shares issued pursuant to the Grant Registration Agreement, to a third party.</p> <!--EndFragment--></div> </div> 4275000 845000 500000 845000 80000 75000 25000 75000 25000 8000 8000 766000 56571 2353 2353 104000 56571 20209 56571 19985 56571 742734 766 743500 56514 56571 56571 1174 2 1176 7992 8 8000 129896 104 130000 P3Y P3Y 1.25 1.25 1.25 1.25 1.25 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"><strong>10.</strong></td> <td><strong>Warrants</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The following table summarizes the changes in warrants outstanding and related prices for the shares of the Company&#39;s Common Stock issued to shareholders at December 31, 2013:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Exercise<br /> Price</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Number<br /> Outstanding</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Warrants&nbsp;Outstanding<br /> Weighted&nbsp;Average<br /> Remaining&nbsp;Contractual<br /> Life&nbsp;(years)</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Weighted<br /> Average<br /> Exercise&nbsp;price</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Number<br /> Exercisable</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Warrants&nbsp;Exercisable<br /> Weighted<br /> Average<br /> Exercise&nbsp;Price</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right; WIDTH: 14%"> 1.00-2.50</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 14%; TEXT-ALIGN: right">4,866,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 14%; TEXT-ALIGN: right">2.88</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 14%; TEXT-ALIGN: right">1.89</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 14%; TEXT-ALIGN: right">4,866,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 13%; TEXT-ALIGN: right">1.89</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> Transactions involving the Company&#39;s warrant issuance are summarized as follows:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Number&nbsp;of&nbsp;<br /> Shares</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Weighted&nbsp;<br /> Average&nbsp;<br /> Price&nbsp;Per&nbsp;Share</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Outstanding at December&nbsp;31, 2011</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 70%; TEXT-ALIGN: left">Issued - Pre Reverse Merger</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">1,900,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">2.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Issued - Post Reverse Merger</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">825,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2.00</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Exercised</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Expired</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Outstanding at December 31, 2012</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2,725,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2.00</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Issued</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2,141,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1.74</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Exercised</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Expired</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Outstanding at December 31, 2013</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">4,866,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1.89</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong><u>Warrants issued for services (pre-merger warrants):</u></strong>&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On July 16, 2012, the Company issued warrants to purchase 1,800,000 shares of Common Stock at an exercise price of $2.00 per share or exercisable on a cashless basis. The holder of warrants may opt, at its sole discretion,&nbsp;for a cashless exercise of all or part of the warrants if the market price of the Company&#39;s common stock is less than the exercise price or $2.00. The warrants expire five years from the date of grant.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On September 1, 2012, the Company issued warrants to purchase 100,000 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of grant.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong><u>Warrants issued concurrent with convertible notes (post-merger warrants):</u></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On October 18, 2012, the Company issued warrants to purchase 525,000 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $50,391 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On November 8, 2012, the Company issued warrants to purchase 275,000 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $26,395 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On December 19, 2012, the Company issued warrants to purchase 25,000 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $2,400 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On January 10, 2013, the Company issued warrants to purchase 37,500 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $3,598 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On January 15, 2013, the Company issued warrants to purchase 25,000 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $2,401 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On January 28, 2013, the Company issued warrants to purchase 62,500 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $5,999 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On February 15, 2013, the Company issued warrants to purchase 18,750 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $1,798 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On March 4, 2013, the Company issued warrants to purchase 18,750 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $1,799 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On March 22, 2013, the Company issued warrants to purchase 18,750 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $1,800 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On March 28, 2013, the Company issued warrants to purchase 6,250 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $600 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On April 4, 2013, the Company issued warrants to purchase 50,000 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $4,799 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On April 17, 2013, the Company issued warrants to purchase 125,000 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $11,998 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On April 18, 2013, the Company issued warrants to purchase 250,000 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $23,996 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On April 18, 2013, the Company issued warrants to purchase 287,500 shares of Common Stock to private placement agent at an exercise price of $2.40 per share. The warrants expire five years from the date of issuance. The Company valued the warrants at $133,277 using the Black-Scholes option pricing model and charged to operations fair value during the year ended December 31, 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On June 21, 2013, the Company issued warrants to purchase 64,500 shares of Common Stock to private placement agent at an exercise price of $2.40 per share. The warrants expire five years from the date of issuance. The Company valued the warrants at $29,900 using the Black-Scholes option pricing model and charged to operations fair value during the year ended December 31, 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On June 25, 2013, the Company issued warrants to purchase 322,500 shares of Common Stock at an exercise price of $2.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $30,955 using the Black-Scholes option pricing model and amortizes it over the term of the note.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, the Company entered into an Asset Purchase Agreement and issued the seller warrants to purchase 250,000 shares of Common Stock at an exercise price of $1.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $128,993 using the Black-Scholes option pricing model.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On September 6, 2013, the Company issued warrants to purchase 500,000 shares of Common Stock at an exercise price of $1.00 per share. The warrants expire three years from the date of issuance. The Company valued the warrants at $259,119 using the Black-Scholes option pricing model.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The fair value of these warrants issued and the significant assumptions used to determine those fair values, using a Black-Scholes option-pricing model are as follows:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt"> <strong>Significant&nbsp;assumptions:</strong></td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td colspan="2">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Risk-free interest rate at grant date</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">0.60%-0.91</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 85%; TEXT-ALIGN: left">Expected stock price volatility</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">80.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Expected dividend payout</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Expected option life-years</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">(a)</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in">(a)</td> <td>All warrants issued expire in 3-5 years. The remaining life of the warrants is 2.88 years.</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Subscription Agreement</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On October 8, 2013, the Company commenced an offering of up to $5,000,000 representing 4,000,000 Units for $1.25 per unit. Each Unit consists of: (i) one share (the "Shares") of Company common stock, par value $<font style="BACKGROUND-COLOR: white">0.001 per share</font>&nbsp;("Common Stock") and (ii) a warrant (the "Warrants") to purchase one share of Common Stock (the "Warrant Shares"). The Warrants may be exercised until October 31, 2016 at an exercise price of $2.50 per Warrant Share.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Through December 31, 2013, the Company issued 104,000 warrants in connection with such closings.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0in">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 0.25in"> <strong>10.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> <strong>Warrants</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong><u>Warrants issued concurrent with convertible notes (post-merger warrants):</u></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In connection with the issuance of its convertible debentures, the Company issued 187,500 warrants to the noteholders during the three-month period ended March 31, 2013. The Company accounts for the warrant valuation in accordance with FASB ASC 470-20, Debt with Conversion and Other Options. The Company records the fair value of warrants issued in connection with those instruments. The discount recorded in connection with the warrant valuation is recognized as non-cash interest expense and is amortized over the term of the convertible note. The fair value of the warrants, which amounted to $17,995 has been recognized as beneficial conversion feature and recorded as debt discount during the three-month period ended March 31, 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The fair value of these warrants issued and the significant assumptions used to determine those fair values, using a Black-Scholes option-pricing model are as follows:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; FONT: bold 10pt Times New Roman, Times, Serif"> Significant&nbsp;assumptions:</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt" colspan="2">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Risk-free interest rate at grant date</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; TEXT-ALIGN: right"> 0.60%-0.85</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> %</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Expected stock price volatility</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 80.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> %</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Expected dividend payout</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Expected option life-years</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; TEXT-ALIGN: right"> (a)</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> (a)</td> <td style="WIDTH: 94%; PADDING-RIGHT: 0.8pt"><font style="FONT: 10pt Times New Roman, Times, Serif">All warrants issued expire in 3-5 years.</font> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Warrants issued pursuant to Subscription Agreement</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On October 8, 2013, the Company commenced an offering of up to $5,000,000 representing 4,000,000 Units for $1.25 per unit. Each Unit consists of: (i) one share (the "Shares") of Company Common Stock, par value $0.001 per share ("Common Stock") and (ii) a warrant (the "Warrants") to purchase one share of Common Stock (the "Warrant Shares"). The Warrants expire in three years from their issuance date at an exercise price of $2.50 per Warrant Share.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company issued 592,000 warrants in connection with such closings during the three-month period ended March 31, 2014.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Warrants issued pursuant to Settlement of Promissory notes</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company issued 9,375 and 3,125 warrants pursuant to the settlement of certain promissory notes and promissory notes-related party in January 2014. The warrants expire in January 2017 and are exercisable at a price of $2.00 per share.</p> <!--EndFragment--></div> </div> 128993 128993 9375 3125 9375 3125 9375 3125 330000 152978 309332 963104 727799 164893 552416 389031 9074 32532 62688 8363 2728 15256 26360 14843 26963 48723 960 79186 3028545 3961443 100000 100000 100000 82394 82394 422296 422296 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>h.</em></strong></td> <td><strong><em>Advertising Costs</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Advertising costs, which are included in general and administrative expenses in the accompanying Statements of Operations, are expensed when incurred. These costs consist primarily of printing for signs, menus, and promotional items. Also included are costs of web based advertising. Total advertising expenses for the year ended December 31, 2013 and 2012 were $111,987 and $54,492, respectively.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>h.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Advertising Costs</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Advertising costs, which are included in general and administrative expenses in the accompanying Statements of Operations, are expensed when incurred. These costs consist primarily of printing for signs, menus, and promotional items. Also included are costs of web based advertising. Total advertising expenses for the three-month period ended March 31, 2014 and 2013 amounted to $25,307 and $12,588, respectively.</p> <!--EndFragment--></div> </div> 111987 54492 25307 12588 82394 53348 9931 48646 4774 14333 8098 158805 321568 167109 14333 166903 88638 2326 27475 15406 4035 1537515 1537515 3520000 1650000 3520000 2024955 2752000 1900000 5470500 2912478 1760000 825000 9386000 5912515 9990500 6474948 1000000 1000000 250000 104000 310166 1357680 1328085 111815 387597 389507 77390 41093 482608 383688 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>b.</em></strong></td> <td><strong><em>Basis of Accounting</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="BACKGROUND-COLOR: white; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-ALIGN: justify"> These consolidated financial statements have been prepared using the basis of accounting generally accepted in the United States of America for annual financial statements and with Form 10-K and article 8 of the Regulation S-X of the United States Securities and Exchange Commission ("SEC"). Under this basis of accounting, revenues are recorded as earned and expenses are recorded at the time liabilities are incurred.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>b.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Basis of Accounting</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The balance sheet presented as of December 31, 2013 has been derived from our audited consolidated financial statements. The unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been omitted pursuant to those rules and regulations, but we believe that the disclosures are adequate to make the information presented not misleading. The unaudited consolidated financial statements and notes included herein should be read in conjunction with the annual consolidated financial statements and notes for the year ended December 31, 2013 included in our Annual Report on Form 10-K filed with the SEC on April 15, 2014.&nbsp;&nbsp;In the opinion of management, all adjustments, consisting of normal, recurring adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results of operations for the three-month period ended March 31, 2014 are not necessarily indicative of the results for the year ending December 31, 2014.</p> <!--EndFragment--></div> </div> 628993 628993 53390 138944 543439 543439 78034 42359 67777 89498 29968 -35675 10257 47139 -48066 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>c.</em></strong></td> <td><strong><em>Cash and Cash Equivalents</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Cash primarily consists of cash on hand and bank deposits. The Company currently has no cash equivalents which would consist of money market accounts and other highly liquid investments with an original maturity of three months or less when purchased.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>c.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Cash and Cash Equivalents</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Cash primarily consists of cash on hand and bank deposits. The Company currently has no cash equivalents which would consist of money market accounts and other highly liquid investments with an original maturity of three months or less when purchased.</p> <!--EndFragment--></div> </div> 2.00 2.00 2.40 2.00 2.00 1.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.50 2.00 2.00 2.00 2.00 1.00 2.00 2.40 2.00 1.00 1.00 2.40 2.40 2.00 12500 12500 1760000 187500 100000 64500 525000 322500 500000 125000 6250 18750 18750 18750 62500 25000 37500 25000 275000 100000 1800000 50000 250000 250000 287500 1800000 500000 500000 64500 287500 100000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"><strong>11.</strong></td> <td><strong>Commitments&nbsp;and&nbsp;Contingencies</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong><u>Operating Leases</u></strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On September 1, 2013 the Company leased a facility ("commissary kitchen") in Los Angeles, California under a five year term totaling $345,132. Under the terms of the lease the Company paid a deposit of $10,620 which has been recorded in Other Assets. Rental expense for the commissary kitchen for the year ended December 31, 2013 totaled $31,860 and over the remaining term was as follows: $64,992 for 2014; $67,590 for 2015; $70,302 for 2016; $73,116 for 2017; and $37,272 for 2018.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On July 1, 2010 the Company leased a facility ("commissary kitchen") in Los Angeles, California under an informal lease letter agreement directly with the Landlord. The rental terms of the lease are on a month to month basis.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On October 21, 2009 the Company executed a Vehicle and Maintenance Agreement with a Los Angeles based mobile food truck vendor. The agreement provides for rental of one or more mobile food trucks on a month to month basis after an initial six minimum month term per truck where rent is payable daily upon return of the truck to the vendor&#39;s service and parking facility.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Combined rental expense for kitchen facilities and food truck rental for the year ended December 31, 2013 and 2012 were $269,039 and $92,622, respectively.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong><u>Consulting Agreements</u></strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em>TRIG Capital Advisory Agreement</em></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On July 16, 2012, the Company entered into an advisory agreement (the "TRIG Capital Advisory Agreement") with TRIG Capital Group, LLC ("TRIG Capital"). The term of the agreement began on the effective date and continues until such agreement is terminated by the parties. Pursuant to the TRIG Capital Advisory Agreement, TRIG Capital provides us with domestic marketing services, management advice and support regarding operations, administrative services, finance and assist with business development as required by the Company. In addition, TRIG Capital assists management in establishing its franchising operations and assisting in the sale of these franchises. Under the TRIG Capital Advisory Agreement, TRIG Capital may engage third parties reasonably acceptable to the Company to assist in its efforts to satisfy the terms of the TRIG Capital Advisory Agreement, but TRIG Capital is liable for any such payments made to third parties engaged by TRIG Capital.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> As compensation for such services, the Company granted TRIG Capital a warrant to purchase 1,800,000 shares of Common Stock (the "TRIG Warrant"). The TRIG Warrant is exercisable until July 16, 2017. The TRIG Warrant is exercisable at $2.00 or on a cashless basis if the market price of the Company&#39;s common stock is less than the exercise price or $2.00.&nbsp;The 1,800,000 warrants were subsequently transferred to Mr. Cervantes, Mr. Goldstein and Mr. Lee, equally. In addition to the TRIG Warrant, since the consummation of the Share Exchange Transaction, the Company pays TRIG Capital a cash bonus of ten (10%) percent of the purchase price of any franchises that TRIG Capital may sell on behalf of the Company. This cash bonus will be extended to TRIG Capital for a period of five (5) years. Additionally, TRIG Capital receives a monthly fee of $7,000 on the last day of each month for a period of no less than 18 months.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em>Trilogy IR Agreement</em></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On July 16, 2012, the Company entered into an investor relations agreement (the "Investor Relations Agreement") with Trilogy Capital Partners, Inc. ("Trilogy"). The parties agreed to an eighteen (18) month contract, whereby Trilogy will provide the services to develop and implement a proactive financial communications program designed to increase the investor awareness of the Company in the investment community. In addition, Trilogy will assist in preparing and disseminating investor relations documents, materials, and our presentations, including press releases, online communications, and Company&#39;s website.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company will pay Trilogy $10,000 per month for these services. In addition, the Company paid Trilogy $25,000 as an engagement fee. Additionally, the Company paid Trilogy $40,000 upon the consummation of the Initial Closing of the 2012 Private Placement Offering and paid an additional $40,000 at the final closing of the 2012 Private Placement Offering.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em>Grandview Capital Advisory Agreement</em></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On July 16, 2012, the Company entered into an advisory agreement (the "Grandview Advisory Agreement") with Grandview Capital Partners, Inc. ("Grandview"). Pursuant to the Grandview Advisory Agreement, Grandview will provide primarily assistance and advice in seeking out a potential additional merger or acquisition partners or targets.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company will pay Grandview $10,000 per month for a period of 18 months. In the event that the Company enters into any transaction involving a sale of our company or the sale of any substantial or material assets within 36 months of the date of the Grandview Advisory Agreement, Grandview will receive a fee between two (2%) and ten (10%) percent of the total transaction, depending on the transaction value, as defined in the Grandview Advisory Agreement. Additionally, the Company paid Grandview a cash success fee of $40,000 upon the consummation of the Initial Closing of the 2012 Private Placement Offering and paid an additional cash success fee of $40,000 at the final closing of the 2012 Private Placement Offering.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On September 6, 2013, the Company entered into a termination agreement (the "Termination Agreement"), whereby the company terminated the Grandview Advisory Agreement with Grandview. The Grandview Advisory Agreement was mutually terminated by the parties because Mr. Goldstein&#39;s relationship with the Company changed. As provided in the Grandview Advisory Agreement and the Termination Agreement, the Company agreed that the provisions relating to the payment of fees (including but not limited to the tail fees specified in the Grandview Advisory Agreement relating to any entities or individuals Grandview introduced to the Company prior to the execution of the Termination Agreement), reimbursement of expenses, indemnification and contribution, independent contractor, conflicts, confidentiality and waiver of the right to trial by jury survive such termination. Peter Goldstein, the recently appointed President, interim Chief Financial Officer, Secretary and Director of the Company, is the founder, chairman, chief executive officer and registered principal of Grandview. Mr. Goldstein was also the Company&#39;s founder and served as President and Director of the Company from December 31, 2009 to April 12, 2012. Mr. Goldstein did not hold any officer or director positions with the Company when the Grandview Advisory Agreement was consummated and through the Company&#39;s 2013 Private Placement Offering.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em>Clark Group Agreement</em></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 15, 2012, the Company entered into an agreement (the "Clark Group Agreement") with Wesley K. Clark &amp; Associates, LLC (the "Clark Group"). The agreement commenced (the "Commencement Date") upon the completion of the Share Exchange Transaction and will continue for a period of two years.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Pursuant to the Clark Group Agreement, General Wesley K. Clark serves as Vice Chairman and Senior Veterans Advisor of the company. Prior to the Commencement Date, the Company paid the Clark Group a $10,000 monthly consultation fee. Following the Commencement Date, the Company paid the Clark Group $200,000 per year for a period of 24 months. The Company also executed a warrant agreement providing the Clark Group with the right to purchase up to 500,000 shares of the Company&#39;s Common Stock (the "Clark Warrants") at an exercise price of $1.00 per share. The Clark Warrants are exercisable on the following basis: (i) 100,000 Clark Warrants following the execution of the first 25 veteran franchise agreements; (ii) 100,000 Clark Warrants following the execution of the next 25 veteran franchise agreements; (iii) 100,000 Clark Warrants following the execution of the next 25 veteran franchise agreements; and (iv) 200,000 Clark Warrants following the execution of the next 25 veteran franchise agreements. General Clark will supervise the development and implementation of recruitment and "vetting" for prospective veteran franchisees.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On September 6, 2013, the agreement with the Clark Group was amended (the "Amended Clark Agreement"). Pursuant to the Amended Clark Agreement, the Clark Group will be paid $240,000 per year in cash in twelve equal installments, payable on the first day of each month in the amount of $20,000. In addition, the Company issued warrants to the Clark Group to purchase 500,000 shares of the Company&#39;s common stock. The warrants have an exercise price of $1.00 and are exercisable for a period of three years from the date of the Amended Clark Agreement. The Amended Clark Agreement also includes new provisions to the performance bonus as follows: (1) in the event the Company&#39;s revenue is in excess of $2,500,000 for any given three month period ending on or prior to July 30, 2014, then the Clark Group is entitled to a cash bonus of $100,000; (2) in the event the Company&#39;s revenue is in excess of $6,250,000 for any given three month period ending on or prior to December 31, 2015, then the Clark Group is entitled to a cash bonus of $150,000; (3) in the event the Company&#39;s revenue is in excess of $12,500,000 for any given three month period ending on or prior to June 30, 2016, then the Clark Group is entitled to a cash bonus of $500,000. The Amended Clark Agreement also includes additional warrant consideration. In the event that the Company&#39;s Common Stock is listed for quotation and begins trading, and within 18 months of the initial trading date the Company&#39;s Common Stock exceeds $5.00 per share for a period of 20 consecutive trading days, the Company will issue the Clark Group warrants to purchase 700,000 shares of the Company&#39;s Common Stock. The warrants will have an exercise price of $2.00, contain cashless exercise provisions, and be exercisable for a period of three years from the date of granting such warrants.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong><u>Employment Agreements</u></strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em>Robert Y. Lee</em></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> On July 16, 2012, the Company entered into an employment agreement (the "Lee Employment Agreement") with Robert Y. Lee to serve as the Executive Chairman of the Company.&nbsp;&nbsp;The agreement stipulated that Mr. Lee would work no fewer than twenty (20) hours per week.&nbsp;&nbsp;In addition, the parties agreed that Mr. Lee would not engage or participate in any business that is in competition in any manner whatsoever with the business of the Company, or any business which the Company contemplates conducting or intends to conducts.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> Pursuant to the terms of the Lee Employment Agreement, the Company paid Mr. Lee $120,000 annually. In addition, Mr. Lee received reimbursements for all reasonable expenses which he incurred during the course of performance under the Lee Employment Agreement. In addition to his annual compensation, the Company paid Mr. Lee a signing bonus of $80,000, of which $40,000 has already been paid. As of September 30, 2013, the Company was unable to pay the remaining bonus of $40,000. The term of the Lee Employment Agreement was for eighteen months.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On September 6, 2013, the Lee Employment Agreement was amended (the "Amended Lee Agreement"). Pursuant to the Amended Lee Agreement, Mr. Lee will be paid $240,000 per year payable in semi-monthly installments on the fifteenth and last day of each month. In addition, Mr. Lee will receive reimbursements from the Company for reasonable out-of-pocket costs and expenses which Mr. Lee incurs in connection with the performance of his duties and obligations under the Amended Lee Agreement in a manner consistent with the Company&#39;s practices and policies. Mr. Lee shall be entitled to reimbursements each month as follows: (A) $1,800, for health insurance, (B) $1,500 life insurance and (C) $2,000 automotive allowance. Mr. Lee will also be entitled to a one-time payment of a non-accountable expense advance of $20,000. The Amended Lee Agreement also includes a performance bonus as follows: (1) in the event the Company&#39;s revenue is in excess of $2,500,000 for any given three month period ending on or prior to July 30, 2014, then Mr. Lee is entitled to a cash bonus of $100,000; (2) in the event the Company&#39;s revenue is in excess of $6,250,000 for any given three month period ending on or prior to December 31, 2015, then Mr. Lee is entitled to a cash bonus of $150,000; (3) in the event the Company&#39;s revenue is in excess of $12,500,000 for any given three month period ending on or prior to June 30, 2016, then Mr. Lee is entitled to a cash bonus of $500,000. The Amended Lee Agreement also includes additional warrant consideration. In the event that the Company&#39;s Common Stock is listed for quotation and begins trading, and within 18 months of the initial trading date the Company&#39;s Common Stock exceeds $5.00 per share for a period of 20 consecutive trading days, the Company will issue Mr. Lee warrants to purchase 700,000 shares of the Company&#39;s Common Stock. The warrants will have an exercise price of $2.00, contain cashless exercise provisions, and be exercisable for a period of three years from the date of granting such warrants.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Mr. Lee will also receive the following additional consideration: (i) the Company will pay Mr. Lee, on a case-by-case basis and on terms and compensation to be negotiated separately from the Amended Lee Agreement and evidenced in a separate agreement, for Mr. Lee&#39;s role with respect to any business development or any management support activities (as such activities are defined in the Amended Lee Agreement) as may be requested or desired by the Company (ii) for any business development whereby Mr. Lee introduces a prospect to the Company that enters into a licensing agreement with the Company, the Company agrees to pay Lee compensation equal to 5%, per annum, of the license fee on a transaction for the entire term of such licensing agreement and (iii) in the event the Company completes a private placement offering pursuant to the new Jumpstart Our Business Startups Act ("Jobs Act") to which the Company raises a minimum of $5,000,000 in net proceeds, then Mr. Lee shall receive a cash payment of $100,000.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> <em>Peter Goldstein</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> <em>&nbsp;</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> On September 6, 2013, the Company entered into an employment agreement with Peter Goldstein (the "Goldstein Employment Agreement"). Pursuant to the Goldstein Employment Agreement, Mr. Goldstein will serve as Director, President, Interim Chief Financial Officer and Secretary of the Company. Mr. Goldstein will be paid $180,000 per year and payable in semi-monthly installments on the fifteenth and last day of each month. In addition, Mr. Goldstein will receive reimbursements from the Company for reasonable out-of-pocket costs and expenses which he incurs in connection with the performance of his duties and obligations under the Goldstein Employment Agreement in a manner consistent with the Company&#39;s practices and policies. Mr. Goldstein is entitled to reimbursement each month as follows: (A) $3,300 for insurance and (B) $2,000 automotive allowance. Mr. Goldstein will also be entitled to a one-time payment of a non-accountable expense advance of $15,000.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Goldstein Employment Agreement also includes a performance bonus as follows: (1) in the event the Company&#39;s revenue is in excess of $2,500,000 for any given three month period ending on or prior to July 30, 2014, then Mr. Goldstein is entitled to a cash bonus of $100,000; (2) in the event the Company&#39;s revenue is in excess of $6,250,000 for any given three month period ending on or prior to December 31, 2015, then Mr. Goldstein is entitled to a cash bonus of $150,000; (3) in the event the Company&#39;s revenue is in excess of $12,500,000 for any given three month period ending on or prior to June 30, 2016, then Mr. Goldstein is entitled to a cash bonus of $500,000. The agreement also includes additional warrant consideration. In the event that the Company&#39;s Common Stock is listed for quotation and begins trading, and within 18 months of the initial trading date the Company&#39;s Common Stock exceeds $5.00 per share for a period of 20 consecutive trading days, the Company will issue Mr. Goldstein warrants to purchase 700,000 shares of the Company&#39;s Common Stock. The warrants will have an exercise price of $2.00, contain cashless exercise provisions, and be exercisable for a period of three years from the date of granting such warrants. Mr. Goldstein will also receive the following additional consideration: (i) the Company shall pay Mr. Goldstein, on a case-by-case basis and on terms and compensation to be negotiated separately from the Goldstein Employment Agreement and evidenced in a separate agreement, for Mr. Goldstein&#39;s role with respect to any business development or any management support activities (as such activities are defined in the Goldstein Employment Agreement) as may be requested or desired by the Company (ii) for any business development whereby Mr. Goldstein introduces a prospect to the Company that enters into a licensing agreement with the Company, the Company agrees to pay Mr. Goldstein compensation equal to 5%, per annum of the license fee on a transaction for the entire term of such licensing agreement and (iii) in the event the Company completes a private placement offering pursuant to the new Jobs Act to which the Company raises a minimum of $5,000,000 in net proceeds, then Mr. Goldstein will receive a cash payment of $100,000.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em>David Danhi</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <em>&nbsp;</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> On October 18, 2012, the Company entered into an employment agreement (the "Danhi Employment Agreement") with David Danhi. The agreement stipulates that Mr. Danhi will work no fewer than (40) hours per week. Pursuant to the terms of the Danhi Employment Agreement, the Company will pay Mr. Danhi $150,000 annually.&nbsp;In addition, Mr. Danhi will receive reimbursement for all reasonable expenses which Danhi incurs during the course of performance under the Danhi Employment Agreement. The term of the Danhi Employment Agreement is for three years. Mr. Danhi can terminate the Employment Agreement after four months with 30 days notice. The Company can terminate the Danhi Employment Agreement upon notice to Mr. Danhi.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> <em>Deepak Devaraj</em></p> <p style="BACKGROUND-COLOR: white; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-ALIGN: justify; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="BACKGROUND-COLOR: white; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-ALIGN: justify"> In connection with the Asset Purchase Agreement, on August 8, 2013, the Company entered into an employment agreement (the "Devaraj Employment Agreement") with Deepak Devaraj. Pursuant to the Devaraj Employment Agreement, Mr. Devaraj was appointed as Director of Business Development and appointed to the Board of Directors (the "Board").&nbsp; The term of employment is for a period of three (3) years, subject to an additional 3 year extension based upon the mutual agreement of the Company and Mr. Devaraj.&nbsp; The Devaraj Employment Agreement stipulates that Mr. Devaraj devote substantially all of his time to the Company. Mr. Devaraj will be entitled to certain benefits, including reimbursement for certain expenses and vacation days. The Devaraj Employment Agreement may be terminated by the Company upon death, Mr. Devaraj&#39;s inability to continue performing his duties under the agreement, a material breach of the provisions of the agreement or for cause (as such term is defined in the Devaraj Employment Agreement).</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <p style="BACKGROUND-COLOR: white; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-ALIGN: justify"> In consideration for entering into the Devaraj Employment Agreement, Mr. Devaraj will receive the following fully vested options to purchase shares of Common Stock: (i) 250,000 options with an exercise price of $2.00 per share (ii) 250,000 options with an exercise price of $3.00 per share (iii) 250,000 options with an exercise price of $4.00 per share, and (iv) 250,000 options with an exercise price of $5.00 per share. Each of the options are exercisable for a term of 10 years (see Note 13). Mr. Devaraj will not be entitled to a base salary, but will receive compensation, on a case-by-case basis and on terms to be negotiated separately from the Devaraj Employment Agreement and evidenced in a separate agreement, for Mr. Devaraj&#39;s role with respect to any business development or any management support activities as may be requested or desired by the Company. &nbsp;Further, in the event Mr. Devaraj introduces the Company to a prospective party that results in the Company entering into a licensing agreement or franchise agreement, Mr. Devaraj shall receive a (a) 5% commission on the first year of the license or franchise fee paid to the Company, (b) 4.5% commission on the second year of the license or franchise fee paid to the Company, (c) 4% commission on the third year of the license or franchise fee paid to the Company, (d) 3.5% commission on the fourth year of the license or franchise fee paid to the Company, (e) 3% commission on the fifth year of the license or franchise fee paid to the Company, and (f) 2.5% commission for the remainder of the term of the license or franchise agreement.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> <strong>Contingencies</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The Company is subject to certain legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0in">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 0.25in"> <strong>11.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> <strong>&nbsp;Contingencies</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> <strong>Contingencies</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The Company is subject to certain legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.</p> <!--EndFragment--></div> </div> 4000000 4000000 0.001 0.001 0.001 100000000 100000000 100000000 8442500 11801257 12513466 3322500 8442500 11801257 12513466 3322500 8443 11802 12514 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"><strong>15.</strong></td> <td><strong>Concentrations</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The following table sets forth information as to each supplier that accounted for 10% or more of the Company&#39;s cost of goods sold for the year ended December 31, 2013 and 2012.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" nowrap="nowrap">Suppliers</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Year Ended<br /> December 31, 2013</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Year Ended<br /> December 31, 2012</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 64%; TEXT-ALIGN: center">&nbsp;A</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 15%; TEXT-ALIGN: right">19</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">%</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 15%; TEXT-ALIGN: right">23</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: center">B</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">12</td> <td style="TEXT-ALIGN: left">%</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> For the year ended December 31, 2013 the Company had one supplier who accounted for approximately $244,000 of their purchases used for production or approximately 19% of cost of sales for the year then ended. The amount payable to supplier A at December 31, 2013 was $32,532 . For the year ended December 31, 2012 the Company had two suppliers who accounted for approximately $353,000 of their purchases used for production or approximately 35% of total purchases for the year then ended. The amounts payable to suppliers A and B at December 31, 2012 were $9,074 and $8,363, respectively.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0in">&nbsp;</td> <td style="WIDTH: 0.25in; TEXT-ALIGN: left"> <strong>14.</strong></td> <td style="TEXT-ALIGN: justify"> <strong>Concentrations</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The following table sets forth information as to each supplier that accounted for 10% or more of the Company&#39;s cost of goods sold for the three-month period ended March 31, 2014 and 2013, respectively.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif"> Suppliers</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">Three-month period ended<br /> March 31, 2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">Three-month period ended<br /> March 31,2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 72%; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif"> A</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 33</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> %</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 18</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> %</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif"> B</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 8</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> %</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> For the three-month period ended March 31, 2014, the Company had one supplier who accounted for approximately $135,000 of their purchases used for production or approximately 33% of total purchases for the period then ended.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> For the three-month period ended March 31, 2013, the Company had two suppliers who accounted for approximately $98,000 of their purchases used for production or approximately 26% of total purchases for the period then ended. The amount payable to supplier A at March 31, 2014 amounted to $62,688.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!-- Field: Page; Sequence: 103; Value: 1 --> <!--EndFragment--></div> </div> 0 0.35 0.19 0.23 0.33 0.18 0.12 0.08 0.35 0.26 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>a.</strong></td> <td><strong><em>Basis of Consolidation</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant inter-company transactions are eliminated.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>a.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Basis of Consolidation</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant inter-company transactions are eliminated.</p> <!--EndFragment--></div> </div> 200000 400000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> At December 31, 2013 and 2012 pre-reverse merger convertible debentures consisted of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December<br /> 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December<br /> 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2012</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: right" colspan="2">&nbsp;</td> <td>&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 70%; TEXT-ALIGN: left">Convertible notes payable</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">-</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">512,500</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Unamortized debt discount</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (172,921</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 2.5pt">Total</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 339,579</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> At December 31, 2013 and December 31, 2012 post-reverse merger convertible debentures consisted of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td style="FONT-WEIGHT: bold">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2"> December<br /> 31,</td> <td style="FONT-WEIGHT: bold">&nbsp;</td> <td style="FONT-WEIGHT: bold">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2"> December<br /> 31,</td> <td style="FONT-WEIGHT: bold">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2">2012</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: right" colspan="2">&nbsp;</td> <td>&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 70%; TEXT-ALIGN: left">Convertible notes payable</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">1,650,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Unamortized debt discount</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (115,508</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (74,411</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 2.5pt">Total</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,404,492</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,575,589</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> At March 31, 2014 and December 31, 2013 post-reverse merger convertible debentures consisted of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">March<br /> 31,</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">December<br /> 31,</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt" colspan="2">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right" colspan="2"> &nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Convertible notes payable</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Unamortized debt discount</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (101,174</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (115,508</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> Total</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,418,826</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> </tr> </table> <!--EndFragment--></div> </div> 512500 512500 1575589 3404492 3418826 100000 1650000 3520000 3520000 1575589 3404492 3418826 339579 339579 244000 135000 353000 98000 2387 2133059 1012304 716050 371503 3341 125000 93750 31250 100000 200000 20000 1696834 1696834 37500 512500 512500 100000 100000 37500 12500 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0px">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>8.</strong></td> <td><strong>Promissory&nbsp;Notes&nbsp;Payable</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On September 21, 2012, September 24, 2012 and October 1, 2012, the Company entered into three secured promissory notes totaling $37,500 due on December 6, 2012 and bearing interest at 12% per annum. In March 2013, the note holders agreed to extend the maturity date of the notes to September 30, 2013. These notes were in default at December 31, 2013. At January 23, 2014, the Company reached settlements with the promissory note holders.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.25in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On December 27, 2013, the Company entered into an unsecured promissory note totaling $44,000 bearing interest at 10% per annum. In addition, upon issuance of the promissory note, the Company issued 8,000 shares of restricted common stock valued at $1 per share and the fair value of $8,000 was charged to statements of operations during the year ended December 31, 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.25in"> <strong>Promissory Notes Payable - Related Party</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On September 12, 2012, the Company entered into a secured promissory note (the "Chord Note") with Chord Advisors, LLC. The Chord Note totaled $12,500 was due on December 6, 2012 and bears interest at 12% per annum. In March 2013, Chord Advisors, LLC agreed to extend the maturity date of the note to December 31, 2013. The Company&#39;s former Chief Financial Officer, David Horin, is the President of Chord Advisors, LLC. This note was in default at December 31, 2013. At January 23, 2014, the Company reached a settlement with the promissory note holder.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> Interest expense recorded on above notes payables for the years ended December 31, 2013 and 2012 amounted to $5,678 and $1,533, respectively.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 0.25in"> <strong>8.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> <strong>Promissory&nbsp;Notes&nbsp;Payable</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On September 21, 2012, September 24, 2012 and October 1, 2012, the Company entered into three secured promissory notes totaling $37,500 due on December 6, 2012 and bearing interest at 12% per annum. In March 2013, the note holders agreed to extend the maturity date of the notes to September 30, 2013. These notes were in default at December 31, 2013. At January 23, 2014, the Company satisfied its obligations under such promissory notes by issuing 75,000 shares of its Common Stock as well as 9,375 warrants. The fair value attributed to the consideration given by the Company to satisfy such obligations was based on the pricing of its subscription agreement (which are priced at $1.25 per share including the warrant) which is contemporaneous to this transaction. The excess of the fair value of the consideration given by the Company, which amounted to $93,750, over the carrying value of the promissory notes and related interest payable, which amounted to $42,852, was recognized as interest expense of $50,898 in the accompanying unaudited consolidated statement of operations during the three-month period ended March 31, 2014.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On December 27, 2013, the Company entered into an unsecured promissory note totaling $44,000 bearing interest at 10% per annum. The Company satisfied its obligations under the note by repaying it in January 2014.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.25in"> <strong>Promissory Notes Payable - Related Party</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On September 12, 2012, the Company entered into a secured promissory note (the "Chord Note") with Chord Advisors, LLC. The Chord Note totaled $12,500, was due on December 6, 2012 and bears interest at 12% per annum. In March 2013, Chord Advisors, LLC agreed to extend the maturity date of the note to December 31, 2013. The Company&#39;s former Chief Financial Officer, David Horin, is the President of Chord Advisors, LLC. This note was in default at December 31, 2013. At January 23, 2014, the Company satisfied its obligations under such promissory notes by issuing 25,000 shares of its Common Stock as well as 3,125 warrants. The fair value attributed to the consideration given by the Company to satisfy such obligations was based on the pricing of its subscription agreement (which are priced at $1.25 per share including the warrants) which is contemporaneous to this transaction. The excess of the fair value of the consideration given by the Company, which amounted to $31,250, over the carrying value of the promissory notes and related interest payable, which amounted to $14,002, was recognized as interest expense of $17,248 in the accompanying unaudited consolidated statement of operations during the three-month&nbsp;period ended March 31, 2014.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> Interest expense recorded on above notes payables for the three-month period ended March 31, 2013 amounted to $1,500.</p> <!--EndFragment--></div> </div> 89743 79186 17995 512500 17995 0.50 0.33 25000 25000 250000 250000 50000 25000 37500 12500 44000 0.1 0.1 0.1 0.1 0.03 0.03 0.1 0.1 0.1 0.0325 0.12 0.12 2012-09-21 2012-09-12 2016-09-28 2016-09-28 2014-03-29 2013-04-08 3013-09-30 2013-12-31 172921 74411 115508 101174 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>n.</em></strong></td> <td><strong><em>Deferred Financing Costs</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Costs incurred with obtaining and executing debt arrangements are capitalized and amortized over the term of the related debt.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>n.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Deferred Financing Costs</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Costs incurred with obtaining and executing debt arrangements are capitalized and amortized over the term of the related debt using the effective interest method.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> 145358 236070 208595 450000 450000 250000 250000 250000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0.25in; TEXT-ALIGN: left"> <strong>5.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Due from Licensee</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On September 27, 2013, the Company issued a licensee a promissory note relating to a one time license fee in the amount of $250,000. The note shall be payable on September 28, 2016 and shall accrue interest at 3% per annum.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 0.25in"> <strong>5.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify"> <strong>Due from Licensee</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On September 27, 2013, the licensee issued a promissory note to the Company relating to a one time license fee in the amount of $250,000. The note matures on September 28, 2016 and bears interest at 3% per annum. The Company has recorded interest income of $4,375 during the three-month period ended March 31, 2014, which has been recorded in other assets.</p> <!--EndFragment--></div> </div> -98000 831800 2393000 831800 2294000 5900000 197000 831800 2393000 10620 12120 7375 21760 2129 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>m.</em></strong></td> <td><strong><em>Convertible Instruments</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for "Accounting for Derivative Instruments and Hedging Activities".</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Professional standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a)&nbsp;the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b)&nbsp;the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c)&nbsp;a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.&nbsp;&nbsp;Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as "The Meaning of "Conventional Convertible Debt Instrument".</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when "Accounting for Convertible Securities with Beneficial Conversion Features," as those professional standards pertain to "Certain Convertible Instruments." Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> ASC 815-40 provides that, among other things, generally, if an event is not within the entity&#39;s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>m.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Convertible Instruments</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for "Accounting for Derivative Instruments and Hedging Activities."</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Professional standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a)&nbsp;the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b)&nbsp;the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c)&nbsp;a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.&nbsp;&nbsp;Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as "The Meaning of "Conventional Convertible Debt Instrument."</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when "Accounting for Convertible Securities with Beneficial Conversion Features," as those professional standards pertain to "Certain Convertible Instruments." Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> ASC 815-40 provides that, among other things, generally, if an event is not within the entity&#39;s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> 2737 311 311 58451 58451 50000 50000 54375 60000 106789 53912 106668 166668 -0.55 -0.14 -0.10 -0.10 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>i.</em></strong></td> <td><strong><em>Earnings (loss) per common share</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company utilizes the guidance per FASB Codification "ASC 260 "Earnings per Share". Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common shares and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon the conversion of convertible notes and the exercise of stock options and warrants (calculated using the modified-treasury stock method).&nbsp;Such securities, shown below, presented on a common share equivalent basis and outstanding as of December 31, 2013 and 2012 have been excluded from the per share computations:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">As of</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">December 31,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2012</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 70%; TEXT-ALIGN: left">Convertible notes issued (Post-Reverse Merger)</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">1,650,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Convertible notes issued (Pre-Reverse Merger)</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,537,515</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Options issued to employee</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,000,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Warrants for services</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2,752,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,900,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Warrants issued in connection with asset purchase</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">250,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Warrants issued in connection with convertible debt</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,760,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">825,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Warrants issued in connection with subscription agreements</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 104,000</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 9,386,000</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,912,515</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>i.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Earnings (loss) per common share</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company utilizes the guidance per FASB Codification "ASC 260 "Earnings per Share". Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common shares and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon the conversion of convertible notes and the exercise of stock options and warrants (calculated using the modified-treasury stock method).&nbsp;Such securities, shown below, presented on a common share equivalent basis and outstanding as of March 31, 2014 and 2013 have been excluded from the per share computations:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="6">As of</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="6">March 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Convertible notes issued (Post-Reverse Merger)</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 2,024,955</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Convertible notes issued (Pre-Reverse Merger)</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 1,537,515</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Options issued to employee</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 1,000,000</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> Warrants</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 5,470,500</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 2,912,478</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 9,990,500</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 6,474,948</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> 9887 134387 824280 P32M P29M 566675 513327 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>l.</em></strong></td> <td><strong><em>Fair Value of Financial Instruments</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Effective January 1, 2008, the Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company&#39;s financial position or operating results, but did expand certain disclosures.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.75in; TEXT-INDENT: -0.25in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0.5in">&nbsp;</td> <td style="WIDTH: 0.5in; TEXT-ALIGN: left">Level 1:</td> <td style="TEXT-ALIGN: justify">Observable inputs such as quoted market prices in active markets for identical assets or liabilities</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0.5in">&nbsp;</td> <td style="WIDTH: 0.5in; TEXT-ALIGN: left">Level 2:</td> <td style="TEXT-ALIGN: justify">Observable market-based inputs or unobservable inputs that are corroborated by market data</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.75in; TEXT-INDENT: -0.25in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0.5in">&nbsp;</td> <td style="WIDTH: 0.5in; TEXT-ALIGN: left">Level 3:</td> <td style="TEXT-ALIGN: justify">Unobservable inputs for which there is little or no market data, which require the use of the reporting entity&#39;s own assumptions.</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company did not have any Level 2 or Level 3 assets or liabilities as of December 31, 2013, with the exception of its convertible notes payable. The carrying amounts of these liabilities at December 31, 2013 approximate their respective fair value based on the Company&#39;s incremental borrowing rate.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Cash is considered to be highly liquid and easily tradable as of December 31, 2013 and therefore classified as Level 1 within our fair value hierarchy.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>l.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Fair Value of Financial Instruments</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Effective January 1, 2008, the Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company&#39;s financial position or operating results, but did expand certain disclosures.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 7%; TEXT-ALIGN: justify">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 6%"> Level 1:</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify; WIDTH: 87%"> Observable inputs such as quoted market prices in active markets for identical assets or liabilities</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 7%; TEXT-ALIGN: justify">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 6%"> Level 2:</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify; WIDTH: 87%"> Observable market-based inputs or unobservable inputs that are corroborated by market data</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.75in; TEXT-INDENT: -0.25in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 7%; TEXT-ALIGN: justify">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 6%"> Level 3:</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 0in; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify; WIDTH: 87%"> Unobservable inputs for which there is little or no market data, which require the use of the reporting entity&#39;s own assumptions.</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company did not have any Level 2 or Level 3 assets or liabilities as March 31, 2014 and December 31, 2013, with the exception of its convertible notes payable. The carrying amounts of these liabilities at March 31, 2014 and December 31, 2013 approximate their respective fair value based on the Company&#39;s incremental borrowing rate.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <em>Additional Disclosures Regarding Fair Value Measurements</em></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The carrying value of cash and cash equivalents, accounts receivable, note receivable, other receivable, accounts payable and accrued expenses, notes payable, promissory notes and due from licensee- including related parties liabilities- approximate their fair value due to the short term maturity of these items.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> &nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.</p> <!--EndFragment--></div> </div> 142309 0 659683 358213 180063 129907 -1440 -1440 93750 31250 14679 2532334 994644 799680 380446 -103727 296191 -81987 10866 134909 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>o.</em></strong></td> <td><strong><em>Impairment of Long-Lived Assets</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In accordance with ASC 360 "Property, Plant, and Equipment", we periodically review our long-lived assets, including goodwill and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable.&nbsp;&nbsp;We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset.&nbsp;&nbsp;The amount of impairment is measured as the difference between the estimated fair value and the book value of the underlying asset. An impairment was necessary as of December 31, 2013. The Company fully impaired certain intellectual property comprised of trademarks, patents, domain names, technology rights, inventions etc. valued at $134,909 which was purchased on August 8, 2013 related to an asset purchase agreement. The impairment was recorded as impairment of intangible assets in the Company&#39;s accompanying consolidated statement of operations for the year ended December 2013. Since purchasing the intangible assets, the Company has not realized any benefit and management could not ascertain that the fair value of the intangibles would exceed their carrying value at December 31, 2013 and whether the intangible assets would generate positive cash flows for the foreseeable future. The Level of the fair value hierarchy used by management was Level 3. The intangible assets were remeasured on a non-recurring basis at December 31, 2013. The Company&#39;s executive management undertook to perform the analysis of the valuation of the intangible assets. The highest and best use of the intangible assets does not differ from their current or intended use.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> In addition, the Company purchased vehicles related to the asset purchase agreement dated August 8, 2013. The Company hired an appraiser to assess the value of the vehicles. The appraiser determined the value of the vehicles and the Company recorded an impairment of $142,309.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>o.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Impairment of Long-Lived Assets</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> In accordance with ASC 360 "Property, Plant, and Equipment", we periodically review our long-lived assets, including goodwill and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable.&nbsp;&nbsp;We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset.&nbsp;&nbsp;The amount of impairment is measured as the difference between the estimated fair value and the book value of the underlying asset. An impairment was necessary as of December 31, 2013. The Company fully impaired certain intellectual property comprised of trademarks, patents, domain names, technology rights, inventions etc. valued at $134,909 which was purchased on August 8, 2013 related to an asset purchase agreement. The impairment was recorded as impairment of intangible assets in the Company&#39;s accompanying consolidated statement of operations for the year ended December 2013. Since purchasing the intangible assets, the Company has not realized any benefit and management could not ascertain that the fair value of the intangibles would exceed their carrying value at December 31, 2013 and whether the intangible assets would generate positive cash flows for the foreseeable future. The Level of the fair value hierarchy used by management was Level 3. The intangible assets were remeasured on a non-recurring basis at December 31, 2013. The Company&#39;s executive management undertook to perform the analysis of the valuation of the intangible assets. The highest and best use of the intangible assets does not differ from their current or intended use.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> In addition, the Company purchased vehicles related to the asset purchase agreement dated August 8, 2013. The Company hired an appraiser to assess the value of the vehicles. The appraiser determined the value of the vehicles and the Company recorded an impairment of $142,309 at December 31, 2013.</p> <!--EndFragment--></div> </div> -5612919 -1192552 -1202497 -831037 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>16. &nbsp;&nbsp;&nbsp;Income Taxes</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company accounts for income taxes under ASC 740, "Expenses - Income Taxes". ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry forwards. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Through October 18, 2012, Grilled Cheese Truck Inc. was an S Corporation that operated out of the State of California.&nbsp;&nbsp;Tax returns were filed as an S Corporation, which is a &#39;pass through entity&#39; for tax purposes.&nbsp;&nbsp;Taxable income flowed through to members, and income taxes were not imposed at the company level, except in special circumstances.&nbsp;Subsequent to the Reverse Acquisition Agreement on October 18, 2012, operations are consolidated with those of TRIG Acquisition 1, Inc., a Nevada corporation, which is subject to both Federal and State income taxes.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The table below summarizes the reconciliation of the Company&#39;s income tax provision (benefit) computed at the statutory U.S. Federal rate and the actual tax provision:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6"> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px">Year Ended</p> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px">December 31,</p> </td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2013</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ccffcc"> <td style="FONT-SIZE: 10pt; WIDTH: 72%; TEXT-ALIGN: left">Income tax (benefit) provision&nbsp;at the Federal statutory rate</td> <td style="FONT-SIZE: 10pt; WIDTH: 2%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; WIDTH: 10%; TEXT-ALIGN: right"> (1,908,000</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">)</td> <td style="FONT-SIZE: 10pt; WIDTH: 2%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; WIDTH: 10%; TEXT-ALIGN: right"> (405,000</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">State income taxes, net of Federal benefit</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">(285,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">)</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">(72,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ccffcc"> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">Benefit of loss (tax liability)&nbsp;&nbsp;not realized due to the Company status as a "pass through entity" for tax proposes</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">-</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">23,800</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">Amortization of debt discount and deferred financing costs</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">129,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">66,800</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ccffcc"> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">Common stock issued for services</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">300,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">-</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">Other</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,300</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ccffcc"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> Valuation tax asset allowance</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,764,000</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 382,000</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> Tax provision</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> (100</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> )</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The net operating loss carryforwards available amount to approximately $5.9 million at December 31, 2013, of which approximately $1.1 million is subject to limitation for change in ownership, for purposes of utilization of the Company&#39;s NOL&#39;s under Section 382, may have occurred with the reverse merger that was entered into on October 18, 2012. Subsequent to the reverse merger on October 18, 2012, the Company has assumed the net operating loss ("NOL") carry forward of TRIG Acquisition 1, Inc. This NOL will be expiring through the year 2033.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Included in the deferred tax asset is the aforementioned NOL. The Company is not able to predict if such future taxable income will be more likely than not sufficient to utilize the benefit. As such, the Company does not believe the benefit is more likely than not to be realized and they have recognized a full valuation allowance for these deferred tax assets.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Included in the deferred tax asset is the aforementioned NOL. The Company is not able to predict if such future taxable income will be more likely than not sufficient to utilize the benefit. As such, the Company does not believe the benefit is more likely than not to be realized and they have recognized a full valuation allowance for these deferred tax assets. The Company&#39;s deferred tax asset as of December 31, 2013 and 2012 is as follows:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6">December 31,</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2013</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="FONT-SIZE: 10pt; WIDTH: 72%; TEXT-ALIGN: left">Net operating losses</td> <td style="FONT-SIZE: 10pt; WIDTH: 2%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; WIDTH: 10%; TEXT-ALIGN: right"> 2,294,000</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 2%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; WIDTH: 10%; TEXT-ALIGN: right"> 831,800</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">Fair value of compensatory options and warrants</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">197,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">-</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> Deferred revenues</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (98,000</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> )</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">2,393,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">831,800</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> Valuation allowance</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (2,393,000</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> )</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (831,800</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> Deferred tax asset, net of allowance</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company has not filed its applicable Federal and State tax returns for the years ended December 31, 2010 through 2012 and may be subject to penalties for noncompliance. The Company has filed an extension for the 2013 filing.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <!--EndFragment--></div> </div> -100 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>j.</em></strong></td> <td><strong><em>Income Taxes</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company accounts for income taxes under FASB Codification Topic 740-10-25 ("ASC 740-10-25"). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Penalties and interest on underpayment of income taxes are reflected in the Company&#39;s effective tax rate.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>j.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Income Taxes</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company accounts for income taxes under FASB Codification Topic 740-10-25 ("ASC 740-10-25"). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Penalties and interest on underpayment of income taxes are reflected in the Company&#39;s effective tax rate.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> <strong>&nbsp;</strong></p> <!--EndFragment--></div> </div> -4300 -1908000 -405000 129000 66800 300000 23800 -285000 -72000 653772 146627 474574 104989 458773 -58588 -163385 94375 12528 5346 11104 18080 1809 -3341 179350 147684 39750 -3341 26200 26200 124500 -43445 324980 40518 87999 62163 226828 66895 6900 -6500 4000 -5289 18914 21057 -7203 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>p.</em></strong></td> <td><strong><em>Intangible Asset</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> In connection with the asset purchase agreement dated August 8, 2013 (see Note 17), the Company identified and recognized an intangible asset of $134,909 representing intellectual property comprised of trademarks, patents, domain names, technology rights, inventions etc. The Company fully impaired the intangible asset (see Note 3 o. - <em>Impairment of Long-Lived Assets)</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>p.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Intangible Asset</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> In connection with the asset purchase agreement dated August 8, 2013 (see Note 15), the Company identified and recognized an intangible asset of $134,909 representing intellectual property comprised of trademarks, patents, domain names, technology rights, inventions etc. The Company fully impaired the intangible asset at December 31, 2013 (see Note 3 o. - <em>Impairment of Long-Lived Assets).</em></p> <!--EndFragment--></div> </div> 335486 47530 144199 67140 5678 1533 1500 50898 17248 32040 15717 15375 1521 458 17248 357 5436 5905 6000 5436 58074 330509 413156 2784 6218 2772 1843 4375 31860 2526396 6234111 6473403 310166 1357680 1328085 950807 2829619 3054577 120414 11105 28270 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0in">&nbsp;</td> <td style="WIDTH: 0.25in; TEXT-ALIGN: left"> <strong>4.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Note Receivable</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On March 18, 2013, the Company received from licensee a promissory note relating to the licensee&#39;s business expansion. The note will accrue interest at 3.25% and is due on demand. In total, the Company had note receivable from the affiliate $226,828 as of December 31, 2013 and the Company has recorded interest income of $2,772 during the year ended December 31, 2013 which has been recorded in other assets.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 0.25in"> <strong>4.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify"> <strong>Note Receivable</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On March 18, 2013, the Company received from licensee a promissory note relating to the licensee&#39;s business expansion. The note bears interest at 3.25% and is due on demand. In total, the Company had a note receivable from the licensee of $226,828 as of March 31, 2014 and December 31, 2013 and the Company has recorded interest income of $1,843 during the three-month period ended March 31, 2014, which has been recorded in other assets.</p> <!--EndFragment--></div> </div> 2129068 1124730 686000 395307 397494 -13196 -230 -232 -2562237 -1101277 -638631 -443141 -5612919 -1192452 -1202497 -831037 -5312919 -1192452 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>s.</em></strong></td> <td><strong><em>Recently Issued Accounting Standards</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company&#39;s results of operations, financial position or cash flows.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>s.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Recently Issued Accounting Standards</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company&#39;s results of operations, financial position or cash flows.</p> <!--EndFragment--></div> </div> 24000 226828 226828 12506 65896 53390 12506 53390 53390 4771442 1269880 923473 592097 -4875169 -973689 -1005460 -581231 345132 64992 37272 73116 70302 67590 2033-12-31 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"><strong>1.</strong></td> <td><strong>Nature of Business</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> TRIG Acquisition 1, Inc. (the "Company") was incorporated in the State of Nevada on December 31, 2009 as GSP-1, Inc. The Company was formed as a vehicle to pursue a business combination. On July 6, 2011, the Company filed a Certificate of Amendment to its Articles of Incorporation to change its name from "GSP-1, Inc." to "TRIG Acquisition 1, Inc."</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On October 18, 2012, the Company entered into a share exchange agreement (the "Exchange Agreement") by and among (i) the Company, (ii) Grilled Cheese, Inc., a California corporation, ("Grilled Cheese"), (iii) GCT, Inc., a Nevada corporation and wholly-owned subsidiary of the Company ("GCT Sub"); (iv) David Danhi, the majority shareholder of Grilled Cheese ("Majority Shareholder") and (v) Michelle Grant, the minority shareholder of Grilled Cheese ("Minority Shareholder", together with the Majority Shareholder, the "Grilled Cheese Shareholders"). Pursuant to the terms of the Exchange Agreement: (1) the Majority Shareholder transferred to GCT Sub all of the shares of Grilled Cheese held by such shareholder in exchange for the issuance of 4,275,000 shares of the Company&#39;s common stock, par value $0.001 per share (the "Common Stock"); and (2) the Minority Shareholder transferred all of the shares of Grilled Cheese held by the Minority Shareholder in exchange for $500,000 and 845,000 shares of Common Stock (the "Share Exchange Transaction").</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Share Exchange Transaction has been accounted for as a reverse acquisition of the Company, by Grilled Cheese but in substance as a capital transaction, rather than a business combination since the Company had nominal operations and assets prior to and as of the closing of the Share Exchange Transaction. The former stockholders of Grilled Cheese represent a significant constituency of the Company&#39;s voting power immediately following the Share Exchange Transaction and Grilled Cheese&#39;s management has assumed operational, financial and governance control. The transaction is deemed a reverse recapitalization and the accounting is similar to that resulting from a reverse acquisition. For accounting purposes Grilled Cheese is treated as the surviving entity and accounting acquirer in accordance with ASC 805, Business Combinations although the Company was the legal acquirer. Accordingly, the Company&#39;s historical financial statements are those of Grilled Cheese. The accumulated losses of Grilled Cheese were carried forward after the completion of the Share Exchange Transaction.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> All reference to Common Stock and per share amounts have been restated to effect the Share Exchange Transaction which occurred on October 18, 2012.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On February 19, 2013, following the Share Exchange Transaction, the Company changed its corporate name from "TRIG Acquisition 1, Inc." to "The Grilled Cheese Truck, Inc."</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company is a food truck operation that sells various types of gourmet grilled cheese and other comfort foods in the Southern California and Phoenix, Arizona areas. The Company&#39;s food trucks currently make multiple stops per week at prearranged locations. The food preparation occurs at a commissary which supports streamlined operations within the truck by limiting assembly and grilling, allowing the truck to achieve maximum revenues per hour by delivering melts, tots, soups and sides efficiently to customers. The Company&#39;s business model includes the use of social media and location booking to attract customers to the truck&#39;s various locations.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="FONT: 10pt Times New Roman, Times, Serif; TEXT-ALIGN: left; WIDTH: 0.25in"> <strong>1.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; TEXT-ALIGN: justify"> <strong>Nature of Business</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> TRIG Acquisition 1, Inc. (the "Company") was incorporated in the State of Nevada on December 31, 2009 as GSP-1, Inc. The Company was formed as a vehicle to pursue a business combination. On July 6, 2011, the Company filed a Certificate of Amendment to its Articles of Incorporation to change its name from "GSP-1, Inc." to "TRIG Acquisition 1, Inc."</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On October 18, 2012, the Company entered into a share exchange agreement (the "Exchange Agreement") by and among (i) the Company, (ii) Grilled Cheese, Inc., a California corporation, ("Grilled Cheese"), (iii) GCT, Inc., a Nevada corporation and wholly-owned subsidiary of the Company ("GCT Sub"); (iv) David Danhi, the majority shareholder of Grilled Cheese ("Majority Shareholder") and (v) Michelle Grant, the minority shareholder of Grilled Cheese ("Minority Shareholder", together with the Majority Shareholder, the "Grilled Cheese Shareholders"). Pursuant to the terms of the Exchange Agreement: (1) the Majority Shareholder transferred to GCT Sub all of the shares of Grilled Cheese held by such shareholder in exchange for the issuance of 4,275,000 shares of the Company&#39;s common stock, par value $0.001 per share (the "Common Stock"); and (2) the Minority Shareholder transferred all of the shares of Grilled Cheese held by the Minority Shareholder in exchange for $500,000 and 845,000 shares of Common Stock (the "Share Exchange Transaction").</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Share Exchange Transaction has been accounted for as a reverse acquisition of the Company, by Grilled Cheese but in substance as a capital transaction, rather than a business combination since the Company had nominal operations and assets prior to and as of the closing of the Share Exchange Transaction. The former stockholders of Grilled Cheese represent a significant constituency of the Company&#39;s voting power immediately following the Share Exchange Transaction and Grilled Cheese&#39;s management assumed operational, financial and governance control. The transaction is deemed a reverse recapitalization and the accounting is similar to that resulting from a reverse acquisition. For accounting purposes, Grilled Cheese is treated as the surviving entity and accounting acquirer in accordance with ASC 805, Business Combinations although the Company was the legal acquirer. Accordingly, the Company&#39;s historical financial statements are those of Grilled Cheese. The accumulated losses of Grilled Cheese were carried forward after the completion of the Share Exchange Transaction.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> All reference to Common Stock and per share amounts have been restated to effect the Share Exchange Transaction which occurred on October 18, 2012.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On February 19, 2013, following the Share Exchange Transaction, the Company changed its corporate name from "TRIG Acquisition 1, Inc." to "The Grilled Cheese Truck, Inc."</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company is a food truck operation that sells various types of gourmet grilled cheese and other comfort foods in the Southern California and Phoenix, Arizona areas. The Company&#39;s food trucks currently make multiple stops per week at prearranged locations. The food preparation occurs at a kitchen which supports streamlined operations within the truck by limiting assembly and grilling, allowing the truck to achieve maximum revenues per hour by delivering our food items including melts, tots, soups and sides efficiently to customers. The Company&#39;s business model includes the use of social media and location booking to attract customers to the truck&#39;s various locations.</p> <!--EndFragment--></div> </div> 11900 78795 96295 250000 250000 424116 354813 109661 65652 269039 92622 10000 52506 14395 230 232 500000 0.001 0.001 0.001 0.001 0.001 0.001 0.001 10000000 10000000 10000000 1000000 1000000 9000000 9000000 0 0 0 0 0 0 31053 25764 46821 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>r.</em></strong></td> <td><strong><em>Reclassifications</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Certain reclassifications have been made to conform the prior period data to the current presentations. These reclassifications had no effect on the reported results.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>r.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Reclassifications</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Certain reclassifications have been made to conform the prior period data to the current presentations. These reclassifications had no effect on the reported results.</p> <!--EndFragment--></div> </div> 312500 1870000 1650000 374955 130000 740000 2000 1050000 1225000 645000 2875000 600000 100000 44000 12500 50000 12506 870000 450000 250000 1199 7500 543439 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"><strong>6.</strong></td> <td><strong>Property and Equipment and Vehicles Held for Sale</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Property and equipment consists of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td nowrap="nowrap">&nbsp;</td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> December<br /> 31,</td> <td nowrap="nowrap">&nbsp;</td> <td nowrap="nowrap">&nbsp;</td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> December<br /> 31,</td> <td nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2012</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: right" colspan="2">&nbsp;</td> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: right" colspan="2">&nbsp;</td> <td>&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">POS systems</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">21,358</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">17,209</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Food service equipment</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">41,691</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">19,671</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Truck equipment</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">5,346</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Vehicles</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">567,384</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">3,500</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Leasehold improvements</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">10,703</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">10,703</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Computers</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2,334</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,789</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 5.4pt"> Furniture and fixtures</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,064</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,064</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; PADDING-LEFT: 9pt">Total</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 651,880</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 55,936</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-LEFT: 9pt">Impairment of vehicles</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">(142,309</td> <td style="TEXT-ALIGN: left">)</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Accumulated depreciation</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (26,963</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (14,843</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt">Total property and equipment and vehicles held for sale</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">482,608</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">41,093</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 9pt"> Reclassed vehicles to vehicles held for sale</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (77,390</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; PADDING-LEFT: 9pt"> Total property and equipment</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 405,218</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 41,093</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Depreciation expense for the year ended December 31, 2013 and 2012 was $12,120 and $7,375, respectively. On August 8, 2013, the Company entered into an Asset Purchase Agreement. As part of the Asset Purchase Agreement, the Company purchased $543,439 worth of equipment and vehicles (see Note 17). The Company had an appraisal performed on the vehicles and recorded an impairment of $142,309, which is recorded as impairment of vehicles in the Company&#39;s accompanying consolidated statement of operations for the year ended December 2013. (see Note 3 o. - <em>Impairment of Long-Lived Assets).</em> During the year ended December 31, 2012, the Company sold a vehicle worth $2,640 net of accumulated depreciation of $960 and for cash of $1,199 and recorded a loss on sale of the vehicle of $1,440.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> As part of the audit process of its 2013 financial statements, and considering certain of the vehicles the Company had acquired pursuant to the Asset Purchase Agreement were either for sale or were idle, the Company tried to determine whether such vehicles&#39; fair value was lower than their carrying value. The Company used the services of a qualified appraiser to determine the fair value of such vehicles. The level of the fair value hierarchy used by the appraiser was categorized as Level 3. While the appraisal considered the market value of comparable vehicles sold within the markets within the area the vehicles were located (market approach), the fair value was adjusted for certain customizations (e.g., kitchen equipment) which either increased or decreased its fair value. Additionally, the appraiser made allowances for the additional options a given vehicle has or its conditions.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The vehicles were remeasured on a non-recurring basis at December 31, 2013. The Company&#39;s executive management undertook to hire the appraiser who would ultimately perform the valuation of the vehicles. The highest and best use of the vehicles does not differ from their current or intended use.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In January 2014, the Company sold two vehicles. Accordingly these vehicles have been classified as vehicles held for sale as of December 31, 2013.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 0.25in"> <strong>6.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify"> <strong>Property and Equipment and Vehicles Held for Sale</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Property and equipment consists of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">March<br /> 31,</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">December<br /> 31,</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right" colspan="2"> &nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right" colspan="2"> &nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> POS systems</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 21,358</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 21,358</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Food service equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 41,691</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 41,691</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Truck equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 5,346</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 5,346</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT: 10pt Times New Roman, Times, Serif">Vehicles</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 347,685</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 567,384</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Leasehold improvements</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 10,703</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 10,703</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT: 10pt Times New Roman, Times, Serif">Computers</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 2,564</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 2,334</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 5.4pt"> Furniture and fixtures</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,064</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,064</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Total</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 432,411</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 651,880</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Impairment of vehicles</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (142,309</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Accumulated depreciation</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (48,723</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (26,963</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Total property and equipment and vehicles held for sale</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 383,688</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 482,608</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Vehicles held for sale</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (77,390</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Total property and equipment</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 383,688</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 405,218</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Depreciation expense for the three-month period ended March 31, 2014 and 2013 amounted to $21,760 and $2,129, respectively.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On August 8, 2013, the Company entered into an Asset Purchase Agreement. As part of the Asset Purchase Agreement, the Company purchased $543,439 worth of equipment and vehicles (see Note 15). The Company had an appraisal performed on the vehicles and recorded an impairment of $142,309, which is recorded as impairment of vehicles in the Company&#39;s accompanying consolidated statement of operations as of December 2013. (see Note 3 o. - <em>Impairment of Long-Lived Assets).</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> As part of the audit process of its 2013 financial statements, and considering certain of the vehicles the Company had acquired pursuant to the Asset Purchase Agreement were either for sale or were idle, the Company tried to determine whether such vehicles&#39; fair value was lower than their carrying value. The Company used the services of a qualified appraiser to determine the fair value of such vehicles. The level of the fair value hierarchy used by the appraiser was categorized as Level 3. While the appraisal considered the market value of comparable vehicles sold within the markets within the area the vehicles were located (market approach), the fair value was adjusted for certain customizations (e.g., kitchen equipment) which either increased or decreased its fair value. Additionally, the appraiser made allowances for the additional options a given vehicle has or its conditions.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The vehicles were remeasured on a non-recurring basis at December 31, 2013. The Company&#39;s executive management undertook to hire the appraiser who would ultimately perform the valuation of the vehicles. The highest and best use of the vehicles does not differ from their current or intended use.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In January 2014, the Company sold two vehicles with an aggregate carrying value of $77,390. Accordingly these vehicles have been classified as vehicles held for sale as of December 31, 2013. In consideration of the sale, one of the buyers assumed the obligations under a note payable which had a carrying value of $53,390 and the other buyer owes the Company $24,000 at March 31, 2014, which is recorded as other asset.</p> <!--EndFragment--></div> </div> 2640 77390 17209 21358 21358 19671 41691 41691 10703 10703 10703 1789 2334 2564 3064 3064 3064 55936 651880 432411 5346 5346 3500 567384 347685 41093 405218 383688 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>e.</strong></td> <td><strong><em>Property and Equipment</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Property and equipment are stated at cost. Depreciation is computed on the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 75%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt; WIDTH: 50%">Computers</td> <td style="FONT-SIZE: 10pt; WIDTH: 50%">4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt">Vehicles</td> <td style="FONT-SIZE: 10pt">4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt">Office Equipment</td> <td style="FONT-SIZE: 10pt">7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt">Food Service Equipment</td> <td style="FONT-SIZE: 10pt">7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt">Furniture and Fixtures</td> <td style="FONT-SIZE: 10pt">7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt">Leasehold Improvements</td> <td style="FONT-SIZE: 10pt">7 Years</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Amortization of leasehold improvements is computed using the straight-line method over the shorter of the life of the lease or the estimated useful life of the assets. Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors. Based on this assessment there was an impairment at December 31, 2013 and 2012 of $130,899 and $0, respectively.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>e.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Property and Equipment</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Property and equipment are stated at cost. Depreciation is computed on the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 9%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 46%"> Computers</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 45%"> 4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Vehicles</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Office Equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Food Service Equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Furniture and Fixtures</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Leasehold Improvements</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Amortization of leasehold improvements is computed using the straight-line method over the shorter of the life of the lease or the estimated useful life of the assets. Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors. Based on this assessment there was an impairment at December 31, 2013 of $142,309.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Property and equipment consists of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">December<br /> 31,</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">December<br /> 31,</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> POS systems</td> <td style="WIDTH: 2%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 10%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 21,358</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 2%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 10%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 17,209</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Food service equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 41,691</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 19,671</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Truck equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 5,346</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT: 10pt Times New Roman, Times, Serif">Vehicles</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 567,384</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,500</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Leasehold improvements</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 10,703</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 10,703</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT: 10pt Times New Roman, Times, Serif">Computers</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 2,334</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 1,789</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 5.4pt"> Furniture and fixtures</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,064</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,064</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Total</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 651,880</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 55,936</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Impairment of vehicles</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (142,309</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Accumulated depreciation</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (26,963</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (14,843</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Total property and equipment and vehicles held for sale</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 482,608</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 41,093</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Reclassed vehicles to vehicles held for sale</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (77,390</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Total property and equipment</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 405,218</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 41,093</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Property and equipment consists of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">March<br /> 31,</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">December<br /> 31,</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right" colspan="2"> &nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right" colspan="2"> &nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> POS systems</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 21,358</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 21,358</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Food service equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 41,691</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 41,691</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Truck equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 5,346</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 5,346</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT: 10pt Times New Roman, Times, Serif">Vehicles</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 347,685</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 567,384</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Leasehold improvements</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 10,703</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 10,703</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT: 10pt Times New Roman, Times, Serif">Computers</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 2,564</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 2,334</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 5.4pt"> Furniture and fixtures</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,064</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,064</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Total</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 432,411</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 651,880</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Impairment of vehicles</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (142,309</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Accumulated depreciation</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (48,723</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (26,963</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Total property and equipment and vehicles held for sale</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 383,688</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 482,608</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Vehicles held for sale</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> (77,390</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 9pt"> Total property and equipment</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 383,688</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 405,218</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <!--EndFragment--></div> </div> 77390 P4Y P4Y P4Y P4Y P7Y P7Y P7Y P7Y P7Y P7Y P7Y P7Y 4465 1122971 -5443 17966 1110448 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>f.</em></strong></td> <td><strong><em>Accounts Receivable</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Accounts receivable are generally unsecured. The majority of the Company&#39;s sales are in cash from truck stop sales. Receivables relate to catering and special event sales. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management&#39;s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>f.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Accounts Receivable</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Accounts receivable are generally unsecured. The majority of the Company&#39;s sales are in cash from truck stop sales. Receivables relate to catering and special event sales. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management&#39;s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts.</p> <!--EndFragment--></div> </div> 120000 45000 2013-06-14 2013-06-30 2013-06-30 1652087 146762 65625 150375 90000 15000 84000 21000 120000 30000 71250 5625 5625 90000 30000 425787 60000 60000 12500 18750 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"><strong>14.</strong></td> <td><strong>Related&nbsp;Party&nbsp;Transactions</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> Stockholders advance funds to the Company from time to time to provide financing for operations.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: center" colspan="2">December&nbsp;31,</td> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: center" colspan="2">December&nbsp;<br /> 31,</td> <td>&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 70%">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Advances from stockholders</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">311</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2,737</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> Advances from stockholders carry no interest, have no terms of repayment or maturity, and are payable on demand. During the year ended December 31, 2013, the Company received $26,200 from stockholders and repaid $28,626.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company entered into a number of related party agreements, as described below, all of which continued after the Share Exchange Transaction with Grilled Cheese. The Company recognized consulting expenses over the requisite service period pursuant to the provisions of each specific agreement.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>a.</strong></td> <td><strong>Trilogy Capital Stock Purchase Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On April 12, 2012, the Company executed a stock purchase agreement with Trilogy and Robert Lee, one of our Directors and Principal Financial Officer. Pursuant to the stock purchase agreement, the Company sold (i) 1,000,000 shares of its Common Stock at a price of $0.001 per share to Trilogy and (ii) 1,000,000 shares of its Common Stock, at a price of $0.001 per share to Robert Lee. The Company received proceeds of $2,000 and will use the net proceeds for general corporate purposes. Our former President, Treasurer, Secretary and director, Alfonso J. Cervantes, owns a 100% equity interest in Trilogy.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>b.</strong></td> <td><strong>Cohen Advisory Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On June 15, 2012, the Company entered into an advisory agreement with Richard M. Cohen Consultants, Inc. (the "Advisor"). The parties agreed that from June 15, 2012 until June 14, 2013, the Advisor would perform advisory and consulting services for the Company. The Company will pay the Advisor $120,000, consisting of: (i) $60,000 of shares of the Company&#39;s Common Stock to be based on the per share price of the Common Stock sold in the 2012 Private Placement Offering, and (ii) $60,000 of cash to be paid in monthly payments of $5,000 pursuant to the terms of the agreement. The agreement may be terminated by the Company for cause, as defined in the agreement. Richard M. Cohen is also the Chairman of Chord Advisors LLC ("Chord") and David Horin, our former Chief Financial officer, is the President of Chord. The Cohen Advisory Agreement contains a share provision, whereby the Company will issue 60,000 shares over the requisite service period based upon a $1.00 per share price of Common Stock sold in our 2012 Private Placement Offering. For the year ended December 31, 2013, the Company incurred fees of $90,000, issued 60,000 shares of common stock valued at $1.00 per share and has an accounts payable balance of $0 as of December 31, 2013. This agreement expired on June 14, 2013 and was not renewed.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>c.</strong></td> <td><strong>TRIG Capital Advisory Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On July 16, 2012, the Company entered into the TRIG Capital Advisory Agreement with TRIG Capital Group, LLC whose members are Alfonso J. Cervantes, a shareholder and the Company&#39;s former President, Secretary and a director of the Company, Robert Lee, the Executive Chairman, Principal Financial Officer and a director of the Company and Peter Goldstein, a shareholder and Financial Advisor to the Company. The term of the agreement shall begin on the effective date and continue until such agreement is terminated by the parties. Pursuant to the TRIG Capital Advisory Agreement, TRIG Capital will provide the Company with foreign and domestic marketing services, management advice and support regarding operations, administrative services, and assist with business development as required by the Company. In addition, TRIG Capital will assist management in establishing its franchising operations and assisting in the sale of these franchises. Under the TRIG Capital Advisory Agreement, TRIG Capital may engage third parties reasonably acceptable to the Company to assist in its efforts to satisfy the terms of the Agreement, but TRIG Capital shall be liable for any such payments made to third parties engaged by TRIG Capital.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> As compensation for such services, the Company granted TRIG Capital the TRIG Warrant to purchase 1,800,000 shares of Common Stock. The TRIG Warrant is exercisable until July 16, 2017. The TRIG Warrant is exercisable at $2.00 or on a cashless basis if the market price of the Company&#39;s common stock is less than the exercise price or $2.00. <font style="BACKGROUND-COLOR: white">The 1,800,000 warrants were subsequently transferred to Mr. Cervantes, Mr. Goldstein and Mr. Lee, equally.</font> In addition to the warrant, the Company will pay TRIG Capital a cash bonus of ten (10%) percent of the purchase price of any franchises that TRIG Capital may sell on behalf of the Company after completion of the Share Exchange Transaction for a period of five (5) years. Additionally, TRIG Capital will receive a monthly fee of $7,000 on the last day of each month for a period of no less than 18 months. For the year ended December 31, 2013, the Company incurred fees of $84,000 and has an accounts payable balance of $58,451 as of December 31, 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;<em>&nbsp;</em></p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>d.</strong></td> <td><strong>Trilogy IR Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On July 16, 2012 the Company entered into the Investor Relations Agreement with Trilogy. The parties agreed to an eighteen (18) month contract, whereby Trilogy will provide the Company with the services to develop and implement a proactive financial communications program designed to increase the investor awareness of the Company in the investment community. In addition, Trilogy will assist the Company in preparing and disseminating investor relations documents, materials, and Company presentations, including press releases, online communications, and the Company&#39;s website.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> The Company will pay Trilogy $10,000 per month for these services. In addition, the Company paid Trilogy $25,000 as an engagement fee. Additionally, the Company paid Trilogy $40,000 upon the consummation of the Initial Closing of the 2012 Private Placement Offering and an additional $40,000 upon the final closing of the 2012 Private Placement Offering. For the year ended December 31, 2013, the Company incurred fees of $120,000 and has an accounts payable balance of $50,000 as of December 31, 2013. Our former President, Secretary and director and current shareholder, Alfonso J. Cervantes, owns a 100% equity interest in Trilogy.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>e.</strong></td> <td><strong>Villard Advisory Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On July 16, 2012, the Company entered into an advisory agreement (the "Villard Advisory Agreement") with Dimitri Villard (the "Advisor"). The parties agreed that from July 1, 2012 until June 30, 2013, the Advisor would perform advisory services for the Company, as well as serving as member of the Company&#39;s Board. The Advisor will devote, on a non-exclusive basis, the necessary time, energy and efforts to the business of the Company and to use his best efforts and abilities to faithfully and diligently promote the Company&#39;s business interests. The Company will pay the Advisor $45,000, consisting of: (i) $22,500 of shares of the Company&#39;s Common Stock to be issued equally on a monthly basis pursuant to the terms of the Villard Advisory Agreement, and (ii) $22,500 of cash to be paid in monthly payments of $1,875 pursuant to the terms of the Villard Advisory Agreement. The Villard Advisory Agreement contains a share provision, whereby the Company will issue $22,500 of shares or 45,000 shares over the requisite service period based upon a 50% discount of the $1.00 per share price of Common Stock sold in the 2012 Private Placement Offering. On September 6, 2013, the Company amended the Villard Advisory Agreement by extending the term of the agreement through February 28, 2014. For the year ended December 31, 2013, the Company incurred fees of $71,250, issued 45,000 shares of common stock valued at $0.50 per share and has an accounts payable balance of $54,375 as of December 31, 2013. On September 6, 2013, Mr. Villard resigned from the Board. His resignation was not the result of any disagreement with the Company on any matter relating to its operation, policies (including accounting or financial policies) or practices.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>f.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Grandview Capital Advisory Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On July 16, 2012, the Company entered into the Grandview Advisory Agreement with Grandview whose majority shareholder is Peter Goldstein, a shareholder and Financial Advisor to the Company. Pursuant to the Grandview Advisory Agreement, Grandview will provide the Company primarily with assistance and advice in seeking out a potential merger or acquisition partner or target.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> The Company will pay Grandview $10,000 per month for a period of 18 months. In the event that the Company enters into any transaction involving a sale of the Company or the sale of any substantial or material assets within 36 months of the date of the Grandview Advisory Agreement, Grandview will receive a fee between two (2%) and ten (10%) percent of the total transaction, depending on the transaction value, as defined in the Grandview Advisory Agreement. Additionally, the Company paid Grandview a cash success fee of $40,000 upon the consummation of the Initial Closing of the 2012 Private Placement Offering and an additional cash success fee of $40,000 upon the final closing of the 2012 Private Placement Offering. For the year ended December 31, 2013, the Company incurred fees of $90,000 and has an accounts payable balance of $106,789 as of December 31, 2013. In addition, Grandview Capital Partners, Inc., acting as one of the placement agents for the 2012 and 2013 private placement offerings, was issued 330,000 warrants. The warrants were charged to operations at a fair value of $152,978.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On September 6, 2013, the Company entered into the Termination Agreement, whereby the company terminated the Grandview Advisory Agreement with Grandview. The Grandview Advisory Agreement was mutually terminated by the parties because Mr. Goldstein&#39;s relationship with the Company changed. As provided in the Grandview Advisory Agreement and the Termination Agreement, the Company agreed that the provisions relating to the payment of fees (including but not limited to the tail fees specified in the Grandview Advisory Agreement relating to any entities or individuals Grandview introduced to the Company prior to the execution of the Termination Agreement), reimbursement of expenses, indemnification and contribution, independent contractor, conflicts, confidentiality and waiver of the right to trial by jury survive such termination. Peter Goldstein, the recently appointed President, interim Chief Financial Officer, Secretary and Director of the Company, is the founder, chairman, chief executive officer and registered principal of Grandview. Mr. Goldstein was also the Company&#39;s founder and served as President and Director of the Company from December 31, 2009 to April 12, 2012. Mr. Goldstein did not hold any officer or director positions with the Company when the Grandview Advisory Agreement was consummated and through the Company&#39;s 2013 Private Placement Offering.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>g.</strong></td> <td><strong>Clark Group Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On August 15, 2012, we entered into the Clark Group Agreement with the Clark Group. General Wesley K. Clark currently serves as Chairman and CEO of the Clark Group. The agreement commenced upon the completion of the Share Exchange Transaction and will continue for a period of two years. This agreement was amended on September 6, 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> General Clark will supervise the development and implementation of recruitment and "vetting" for prospective veteran franchisees. Wesley Clark, Jr.&#39;s responsibilities will be the supervision and administration of the selection process for prospective veteran franchisees, working directly with, and reporting to, Wesley Clark, Sr. in the execution of that process. For the year ended December 31, 2013, the Company incurred fees of $425,787 and has an accounts payable balance of $106,668 as of December 31, 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>h.</strong></td> <td><strong>Chord Advisors Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On August 15, 2012, the Company entered into an agreement (the "Chord Agreement") with Chord. Pursuant to the Chord Agreement, Chord will provide the Company with comprehensive outsourced accounting solutions. The Company will pay Chord $6,250 per month for a period of 12 months. In addition, on September 1, 2012, the Company granted Chord 100,000 warrants with a term of three (3) years and an exercise price of $2.00. Our former Chief Financial Officer, David Horin, is the President of Chord. For the year ended December 31, 2013, the Company incurred fees of $12,500 and has an accounts payable balance of $0 as of December 31, 2013. As of June 30, 2013 this agreement was terminated.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0in">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 0.25in"> <strong>13.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> <strong>Related&nbsp;Party&nbsp;Transactions</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The related party transactions for the three-month periods ended March 31, 2014 and 2013 and as of March 31, 2014 and December 31, 2013, respectively, are summarized below:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> Stockholders advance funds to the Company from time to time to provide financing for operations.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">March 31,</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">December&nbsp;<br /> 31,</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="FONT-SIZE: 10pt; WIDTH: 72%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 11%; TEXT-ALIGN: right"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 11%; TEXT-ALIGN: right"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Advances from stockholders</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 311</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 311</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> Advances from stockholders carry no interest, have no terms of repayment or maturity, and are payable on demand.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>a.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong>Cohen Advisory Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On June 15, 2012, the Company entered into an advisory agreement with Richard M. Cohen Consultants, Inc. (the "Advisor"). The parties agreed that from June 15, 2012 until June 14, 2013, the Advisor would perform advisory and consulting services for the Company. The Company will pay the Advisor $120,000, consisting of: (i) $60,000 of shares of the Company&#39;s Common Stock to be based on the per share price of the Common Stock sold in a 2012 private placement offering, and (ii) $60,000 of cash to be paid in monthly payments of $5,000 pursuant to the terms of the agreement. The agreement may be terminated by the Company for cause, as defined in the agreement. Richard M. Cohen is also the Chairman of Chord Advisors LLC ("Chord") and David Horin, our former Chief Financial officer, is the President of Chord. The advisory agreement contains a share provision, whereby the Company will issue 60,000 shares over the requisite service period based upon a $1.00 per share price of Common Stock sold in a 2012 private placement offering. For the three-month period ended March 31, 2013, the Company incurred fees of $15,000 and has an accounts payable balance of $0 as of March 31, 2014 and December 31, 2013. This agreement expired on June 14, 2013 and was not renewed.</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>b.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong>TRIG Capital Advisory Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On July 16, 2012, the Company entered into a advisory agreement with TRIG Capital Group, LLC whose members are Alfonso J. Cervantes, a shareholder and the Company&#39;s former President, Secretary and a director of the Company, Robert Lee, the Executive Chairman, Principal Financial Officer and a director of the Company and Peter Goldstein, a shareholder and financial advisor to the Company, at that time. The term of the agreement shall begin on the effective date and continue until such agreement is terminated by the parties. Pursuant to the advisory agreement, TRIG Capital will provide the Company with foreign and domestic marketing services, management advice and support regarding operations, administrative services, and assist with business development as required by the Company. In addition, TRIG Capital will assist management in establishing its franchising operations and assisting in the sale of these franchises. Under the advisory agreement, TRIG Capital may engage third parties reasonably acceptable to the Company to assist in its efforts to satisfy the terms of the Agreement, but TRIG Capital shall be liable for any such payments made to third parties engaged by TRIG Capital.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> As compensation for such services, the Company granted TRIG Capital the TRIG Warrant to purchase 1,800,000 shares of Common Stock. The TRIG Warrant is exercisable until July 16, 2017. The TRIG Warrant is exercisable at $2.00 or on a cashless basis if the market price of the Company&#39;s Common Stock is less than the exercise price or $2.00. The 1,800,000 warrants were subsequently transferred to Mr. Cervantes, Mr. Goldstein and Mr. Lee, equally. In addition to the warrant, the Company will pay TRIG Capital a cash bonus of ten (10%) percent of the purchase price of any franchises that TRIG Capital may sell on behalf of the Company after completion of the Share Exchange Transaction for a period of five (5) years. Additionally, TRIG Capital will receive a monthly fee of $7,000 on the last day of each month for a period of no less than 18 months. During the three-month period ended March 31, 2014 and 2013, the Company incurred fees of $0 and $21,000, respectively. The Company has an accounts payable balance of $58,451 and $58,451 as of March 31, 2014 and December 31, 2013, respectively. This agreement lapsed in January 2014.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp; <em>&nbsp;</em></p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>c.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong>Trilogy IR Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On July 16, 2012 the Company entered into the Investor Relations Agreement with Trilogy. The parties agreed to an eighteen (18) month contract, whereby Trilogy will provide the Company with the services to develop and implement a proactive financial communications program designed to increase the investor awareness of the Company in the investment community. In addition, Trilogy will assist the Company in preparing and disseminating investor relations documents, materials, and Company presentations, including press releases, online communications, and the Company&#39;s website.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> The Company will pay Trilogy $10,000 per month for these services. In addition, the Company paid Trilogy $25,000 as an engagement fee. Additionally, the Company paid Trilogy $40,000 upon the consummation of the initial closing of a 2012 private placement offering and an additional $40,000 upon the final closing of a 2012 private placement offering. This agreement lapsed in January 2014.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> During the three month period ending March 31, 2014 and 2013, the Company incurred fees of $0 and $30,000 and has an accounts payable of $50,000 at March 31, 2014 and December 31, 2013. Our former President, Secretary and director and current shareholder, Alfonso J. Cervantes, owns a 100% equity interest in Trilogy.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>d.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong>Villard Advisory Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On July 16, 2012, the Company entered into an advisory agreement (the "Villard Advisory Agreement") with Dimitri Villard (the "Advisor"). The parties agreed that from July 1, 2012 until June 30, 2013, the Advisor would perform advisory services for the Company, as well as serving as member of the Company&#39;s Board. The Advisor will devote, on a non-exclusive basis, the necessary time, energy and efforts to the business of the Company and to use his best efforts and abilities to faithfully and diligently promote the Company&#39;s business interests. The Company will pay the Advisor $45,000, consisting of: (i) $22,500 of shares of the Company&#39;s Common Stock to be issued equally on a monthly basis pursuant to the terms of the Villard Advisory Agreement, and (ii) $22,500 of cash to be paid in monthly payments of $1,875 pursuant to the terms of the Villard Advisory Agreement. The Villard Advisory Agreement contains a share provision, whereby the Company will issue $22,500 of shares or 45,000 shares over the requisite service period based upon a 50% discount of the $1.00 per share price of Common Stock sold in the 2012 private placement offering. On September 6, 2013, the Company amended the Villard Advisory Agreement by extending the term of the agreement through February 28, 2014. During the three-month period ended March 31, 2014 and 2013, the Company incurred fees of $5,625 and $5,625, respectively, and has an accounts payable of $60,000 and $54,375 at March 31, 2014 and December 31, 2013, respectively. On September 6, 2013, Mr. Villard resigned from the Board. His resignation was not the result of any disagreement with the Company on any matter relating to its operation, policies (including accounting or financial policies) or practices.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>e.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify; WIDTH: 94%"> <strong>Grandview Capital Advisory Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On July 16, 2012, the Company entered into the Grandview Advisory Agreement with Grandview whose majority shareholder is Peter Goldstein, a shareholder and financial advisor to the Company at that time. Pursuant to the Grandview Advisory Agreement, Grandview will provide the Company primarily with assistance and advice in seeking out a potential merger or acquisition partner or target.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> The Company will pay Grandview $10,000 per month for a period of 18 months. In the event that the Company enters into any transaction involving a sale of the Company or the sale of any substantial or material assets within 36 months of the date of the Grandview Advisory Agreement, Grandview will receive a fee between two (2%) and ten (10%) percent of the total transaction, depending on the transaction value, as defined in the Grandview Advisory Agreement. Additionally, the Company paid Grandview a cash success fee of $40,000 upon the consummation of the initial closing of the 2012 private placement offering and an additional cash success fee of $40,000 upon the final closing of the 2012 private placement offering. During the three-month period ended March 31, 2013, the Company incurred fees of $30,000 and has an accounts payable balance of $53,912 and $106,789 as of March 31, 2014 and December 31, 2013, respectively.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On September 6, 2013, the Company entered into the Termination Agreement, whereby the company terminated the Grandview Advisory Agreement with Grandview. The Grandview Advisory Agreement was mutually terminated by the parties because Mr. Goldstein&#39;s relationship with the Company changed. As provided in the Grandview Advisory Agreement and the Termination Agreement, the Company agreed that the provisions relating to the payment of fees (including but not limited to the tail fees specified in the Grandview Advisory Agreement relating to any entities or individuals Grandview introduced to the Company prior to the execution of the Termination Agreement), reimbursement of expenses, indemnification and contribution, independent contractor, conflicts, confidentiality and waiver of the right to trial by jury survive such termination. Peter Goldstein, the recently appointed President, interim Chief Financial Officer, Secretary and Director of the Company, is the founder, chairman, chief executive officer and registered principal of Grandview. Mr. Goldstein was also the Company&#39;s founder and served as President and Director of the Company from December 31, 2009 to April 12, 2012. Mr. Goldstein did not hold any officer or director positions with the Company when the Grandview Advisory Agreement was consummated and through the Company&#39;s 2013 private placement offering related to its debentures.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>f.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong>Clark Group Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On August 15, 2012, we entered into the Clark Group Agreement with the Clark Group. General Wesley K. Clark currently serves as Chairman and CEO of the Clark Group. The agreement commenced upon the completion of the Share Exchange Transaction and will continue for a period of two years. This agreement was amended on September 6, 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> General Clark will supervise the development and implementation of recruitment and "vetting" for prospective veteran franchisees. Wesley Clark, Jr.&#39;s responsibilities will be the supervision and administration of the selection process for prospective veteran franchisees, working directly with, and reporting to, Wesley Clark, Sr. in the execution of that process. During the three-month period ended March 31, 2014 and 2013, the Company incurred fees of $60,000 and had an accounts payable balance of $166,668 and $106,668 as of March 31, 2014 and December 31, 2013, respectively.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>g.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong>Chord Advisors Agreement</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> On August 15, 2012, the Company entered into an agreement (the "Chord Agreement") with Chord. Pursuant to the Chord Agreement, Chord will provide the Company with comprehensive outsourced accounting solutions. The Company will pay Chord $6,250 per month for a period of 12 months. In addition, on September 1, 2012, the Company granted Chord 100,000 warrants with a term of three (3) years and an exercise price of $2.00. Our former Chief Financial Officer, David Horin, is the President of Chord. During the three-month period ended March 31, 2013, the Company incurred fees of $18,750 and has an accounts payable balance of $0 as of March 31, 2014 and December 31, 2013. As of June 30, 2013 this agreement was terminated.</p> <!--EndFragment--></div> </div> 12506 12506 9576 94000 4448 28626 40700 1400 -2303859 -7916778 -9119275 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>g.</em></strong></td> <td><strong><em>Revenue Recognition</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company&#39;s revenue is derived from three sources. The primary source is from truck stop sales and lesser portions are from catering and event services and licensed truck sales. Truck stop sales are primarily received in cash and revenue for these sales, net of sales tax, is reported at that time.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> For catering and special event services, customers must sign and deliver the Company&#39;s standard catering agreement with a minimum payment of 50% of the agreed upon price of the event. The remaining balance is due by credit card payment within 2 days of the event or cash on the day of the event. The initial 50% deposit is fully refundable until 14 days prior to the event, between 4 and 13 days prior to the event, the deposit is non-refundable and if the customer cancels within 3 days of the event, 100% of the agreed-upon price of the event is due. Revenue is recognized, net of sales tax, at the time services are provided.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> For licensed truck sales, revenue is based on 6% of gross revenue from truck stop sales collected by the licensee. Revenue is recognized at the end of each month when the licensee is invoiced and the revenue is booked as a receivable.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>g.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Revenue Recognition</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company&#39;s revenue is derived from three sources. The primary source is from truck stop sales and lesser portions are from catering and event services and licensed truck sales. Truck stop sales are primarily received in cash and revenue for these sales, net of sales tax, is reported at that time.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> For catering and special event services, customers must sign and deliver the Company&#39;s standard catering agreement with a minimum payment of 50% of the agreed upon price of the event. The remaining balance is due by credit card payment within 2 days of the event or cash on the day of the event. The initial 50% deposit is fully refundable until 14 days prior to the event, between 4 and 13 days prior to the event, the deposit is non-refundable and if the customer cancels within 3 days of the event, 100% of the agreed-upon price of the event is due. Revenue is recognized, net of sales tax, at the time services are provided.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> For licensed truck sales, revenue is based on 6% of gross revenue from truck stop sales collected by the licensee. Revenue is recognized at the end of each month when the licensee is invoiced and the revenue is booked as a receivable.</p> <!--EndFragment--></div> </div> 2029332 1308495 634063 382369 1484802 953682 513297 288447 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Such securities, shown below, presented on a common share equivalent basis and outstanding as of December 31, 2013 and 2012 have been excluded from the per share computations:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">As of</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">December 31,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2012</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 70%; TEXT-ALIGN: left">Convertible notes issued (Post-Reverse Merger)</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">1,650,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Convertible notes issued (Pre-Reverse Merger)</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,537,515</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Options issued to employee</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,000,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Warrants for services</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2,752,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,900,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Warrants issued in connection with asset purchase</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">250,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Warrants issued in connection with convertible debt</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,760,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">825,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Warrants issued in connection with subscription agreements</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 104,000</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 9,386,000</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,912,515</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Such securities, shown below, presented on a common share equivalent basis and outstanding as of March 31, 2014 and 2013 have been excluded from the per share computations:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="6">As of</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="6">March 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Convertible notes issued (Post-Reverse Merger)</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 2,024,955</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Convertible notes issued (Pre-Reverse Merger)</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 1,537,515</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Options issued to employee</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 1,000,000</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> Warrants</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 5,470,500</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 2,912,478</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 9,990,500</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 6,474,948</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The Company&#39;s deferred tax asset as of December 31, 2013 and 2012 is as follows:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6">December 31,</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2013</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="FONT-SIZE: 10pt; WIDTH: 72%; TEXT-ALIGN: left">Net operating losses</td> <td style="FONT-SIZE: 10pt; WIDTH: 2%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; WIDTH: 10%; TEXT-ALIGN: right"> 2,294,000</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 2%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; WIDTH: 10%; TEXT-ALIGN: right"> 831,800</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">Fair value of compensatory options and warrants</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">197,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">-</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> Deferred revenues</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (98,000</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> )</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">2,393,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">831,800</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> Valuation allowance</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (2,393,000</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> )</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (831,800</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> )</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> Deferred tax asset, net of allowance</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The table below summarizes the reconciliation of the Company&#39;s income tax provision (benefit) computed at the statutory U.S. Federal rate and the actual tax provision:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6"> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px">Year Ended</p> <p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px">December 31,</p> </td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2013</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ccffcc"> <td style="FONT-SIZE: 10pt; WIDTH: 72%; TEXT-ALIGN: left">Income tax (benefit) provision&nbsp;at the Federal statutory rate</td> <td style="FONT-SIZE: 10pt; WIDTH: 2%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; WIDTH: 10%; TEXT-ALIGN: right"> (1,908,000</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">)</td> <td style="FONT-SIZE: 10pt; WIDTH: 2%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; WIDTH: 10%; TEXT-ALIGN: right"> (405,000</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">State income taxes, net of Federal benefit</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">(285,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">)</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">(72,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ccffcc"> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">Benefit of loss (tax liability)&nbsp;&nbsp;not realized due to the Company status as a "pass through entity" for tax proposes</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">-</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">23,800</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">Amortization of debt discount and deferred financing costs</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">129,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">66,800</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ccffcc"> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">Common stock issued for services</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">300,000</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">-</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">Other</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,300</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ccffcc"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> Valuation tax asset allowance</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,764,000</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 382,000</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> Tax provision</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="FONT-SIZE: 10pt; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> (100</td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> )</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: center" colspan="2">December&nbsp;31,</td> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: center" colspan="2">December&nbsp;<br /> 31,</td> <td>&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 70%">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Advances from stockholders</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">311</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2,737</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The related party transactions for the three-month periods ended March 31, 2014 and 2013 and as of March 31, 2014 and December 31, 2013, respectively, are summarized below:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> Stockholders advance funds to the Company from time to time to provide financing for operations.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">March 31,</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">December&nbsp;<br /> 31,</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="FONT-SIZE: 10pt; WIDTH: 72%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 11%; TEXT-ALIGN: right"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%">&nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 11%; TEXT-ALIGN: right"> &nbsp;</td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; TEXT-ALIGN: left"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Advances from stockholders</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 311</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> $</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 311</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> A summary of the activity during 2013 of the Company&#39;s stock option plan is presented below:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Options</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Weighted&nbsp;<br /> Average&nbsp;<br /> Exercise&nbsp;Price</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Aggregate&nbsp;<br /> Intrinsic&nbsp;<br /> Value</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Outstanding at January 1, 2013</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 55%">Granted</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">1,000,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">3.50</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Exercised</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Expired or cancelled</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Outstanding at December 31, 2013</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,000,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">3.50</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">&nbsp;&nbsp;-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The fair value of the options granted during the year ended December 31, 2013 are based on the Black Scholes Model using the following assumptions:&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 60%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 85%">Exercise price:</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">1.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Market price at date of grant:</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1.00</td> <td style="TEXT-ALIGN: left">(1)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Volatility:</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">80</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Expected dividend rate:</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">0</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Expected terms (years):</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">10</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Risk-free interest rate:</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">0.03</td> <td style="TEXT-ALIGN: left">%</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> (1) The Company used fair value of the Company&#39;s common stock as the market price to value stock options which were granted. The fair value was determined based on valuation performed by Management, which took into consideration, where applicable, cash received , market participant inputs, estimated cash flows based on entity specific criteria, purchase multiples paid in other comparable third-party transactions, market conditions, liquidity, operating results and other qualitative and quantitative factors. <font style="BACKGROUND-COLOR: white">The fair value of the Company&#39;s common stock on each grant date are adjusted to estimated fair value and the volatility in general economic conditions, stock markets, earnings or revenue multiples of comparable companies and other qualitative and quantitative factors may result in significant changes in the estimated fair value of the Company&#39;s common stock from period to period.</font></p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> Transactions involving the Company&#39;s warrant issuance are summarized as follows:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Number&nbsp;of&nbsp;<br /> Shares</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Weighted&nbsp;<br /> Average&nbsp;<br /> Price&nbsp;Per&nbsp;Share</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Outstanding at December&nbsp;31, 2011</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 70%; TEXT-ALIGN: left">Issued - Pre Reverse Merger</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">1,900,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">2.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Issued - Post Reverse Merger</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">825,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2.00</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Exercised</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Expired</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Outstanding at December 31, 2012</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2,725,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2.00</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Issued</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2,141,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1.74</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Exercised</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Expired</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Outstanding at December 31, 2013</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">4,866,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1.89</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The following table sets forth information as to each supplier that accounted for 10% or more of the Company&#39;s cost of goods sold for the year ended December 31, 2013 and 2012.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" nowrap="nowrap">Suppliers</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Year Ended<br /> December 31, 2013</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Year Ended<br /> December 31, 2012</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 64%; TEXT-ALIGN: center">&nbsp;A</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 15%; TEXT-ALIGN: right">19</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">%</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 15%; TEXT-ALIGN: right">23</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: center">B</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">12</td> <td style="TEXT-ALIGN: left">%</td> </tr> </table> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The following table sets forth information as to each supplier that accounted for 10% or more of the Company&#39;s cost of goods sold for the three-month period ended March 31, 2014 and 2013, respectively.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif"> Suppliers</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">Three-month period ended<br /> March 31, 2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">Three-month period ended<br /> March 31,2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 72%; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif"> A</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 33</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> %</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 18</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> %</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif"> B</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 8</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> %</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <!--EndFragment--></div> </div> 293648 121099 36408 59147 P10Y P10Y P10Y P10Y P10Y P10Y P10Y P10Y 104000 592000 652000 1.00 2017-07-16 2016-10-31 P3Y P5Y P3Y P3Y P3Y P3Y P3Y P3Y P3Y P3Y P3Y P3Y P3Y P3Y P3Y P5Y P3Y P3Y P3Y P3Y P5Y P3Y P3Y 0 P3Y P3Y P5Y P5Y P10Y P2Y10M17D 0.8 0.8 0.8 0.0003 0.0091 0.0085 0.006 0.006 1900000 825000 2141000 2725000 4866000 4000000 250000 250000 250000 250000 250000 250000 250000 250000 1000000 1000000 1000000 3.50 3.50 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>q.</em></strong></td> <td><strong><em>Stock-Based Compensation</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company adopted the provisions of ASC 718.&nbsp;We estimate the fair value of stock options using a binomial model, consistent with the provisions of ASC 718 and SEC Staff Accounting Bulletin No.&nbsp;107,&nbsp;<em>Share-Based Payment</em>. Option-pricing models require the input of highly subjective assumptions, including the price volatility of the underlying stock.&nbsp;We determined that the use of implied volatility is expected to be more reflective of market conditions and, therefore, could reasonably be expected to be a better indicator of our expected volatility than historical volatility. The expected term assumption used in calculating the estimated fair value of our stock-based compensation awards using the binomial model is based on detailed historical data about employees&#39; exercise behavior, vesting schedules, and death and disability probabilities. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. We estimate the forfeiture rate based on historical experience of our stock-based awards that are granted, exercised and cancelled. We believe the resulting binomial calculation provides a more refined estimate of the fair value of our employee stock options. For our employee stock purchase plan, we decided to continue to use the Black-Scholes model to calculate the estimated fair value.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>q.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Stock-Based Compensation</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company adopted the provisions of ASC 718.&nbsp;We estimate the fair value of stock options using a binomial model, consistent with the provisions of ASC 718 and SEC Staff Accounting Bulletin No.&nbsp;107,&nbsp;<em>Share-Based Payment</em>. Option-pricing models require the input of highly subjective assumptions, including the price volatility of the underlying stock.&nbsp;We determined that the use of implied volatility is expected to be more reflective of market conditions and, therefore, could reasonably be expected to be a better indicator of our expected volatility than historical volatility. The expected term assumption used in calculating the estimated fair value of our stock-based compensation awards using the binomial model is based on detailed historical data about employees&#39; exercise behavior, vesting schedules, and death and disability probabilities. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. We estimate the forfeiture rate based on historical experience of our stock-based awards that are granted, exercised and cancelled. We believe the resulting binomial calculation provides a more refined estimate of the fair value of our employee stock options. For our employee stock purchase plan, we decided to continue to use the Black-Scholes model to calculate the estimated fair value.</p> <!--EndFragment--></div> </div> 1.00 1.00 1.00 0.50 1.25 1.00 1.00 1.00 1.00 1.00 0.001 0.001 1.00 0.50 8442500 11801257 200 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"><strong>3.</strong></td> <td><strong>Summary of Significant Accounting Policies</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>a.</strong></td> <td><strong><em>Basis of Consolidation</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant inter-company transactions are eliminated.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>b.</em></strong></td> <td><strong><em>Basis of Accounting</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> These consolidated financial statements have been prepared using the basis of accounting generally accepted in the United States of America for annual financial statements and with Form 10-K and article 8 of the Regulation S-X of the United States Securities and Exchange Commission ("SEC"). Under this basis of accounting, revenues are recorded as earned and expenses are recorded at the time liabilities are incurred.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>c.</em></strong></td> <td><strong><em>Cash and Cash Equivalents</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Cash primarily consists of cash on hand and bank deposits. The Company currently has no cash equivalents which would consist of money market accounts and other highly liquid investments with an original maturity of three months or less when purchased.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>d.</strong></td> <td><strong><em>Use of Estimates in Preparation of Financial Statements</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 9pt; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>e.</strong></td> <td><strong><em>Property and Equipment</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Property and equipment are stated at cost. Depreciation is computed on the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:</p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; WIDTH: 50%"> Computers</td> <td style="FONT: 10pt Times New Roman, Times, Serif; WIDTH: 50%">4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif">Vehicles</td> <td style="FONT: 10pt Times New Roman, Times, Serif">4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif">Office Equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif">7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif">Food Service Equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif">7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif">Furniture and Fixtures</td> <td style="FONT: 10pt Times New Roman, Times, Serif">7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif">Leasehold Improvements</td> <td style="FONT: 10pt Times New Roman, Times, Serif">7 Years</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Amortization of leasehold improvements is computed using the straight-line method over the shorter of the life of the lease or the estimated useful life of the assets. Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors. Based on this assessment there was an impairment at December 31, 2013 and 2012 of $130,899 and $0, respectively.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>f.</em></strong></td> <td><strong><em>Accounts Receivable</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Accounts receivable are generally unsecured. The majority of the Company&#39;s sales are in cash from truck stop sales. Receivables relate to catering and special event sales. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management&#39;s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>g.</em></strong></td> <td><strong><em>Revenue Recognition</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company&#39;s revenue is derived from three sources. The primary source is from truck stop sales and lesser portions are from catering and event services and licensed truck sales. Truck stop sales are primarily received in cash and revenue for these sales, net of sales tax, is reported at that time.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> For catering and special event services, customers must sign and deliver the Company&#39;s standard catering agreement with a minimum payment of 50% of the agreed upon price of the event. The remaining balance is due by credit card payment within 2 days of the event or cash on the day of the event. The initial 50% deposit is fully refundable until 14 days prior to the event, between 4 and 13 days prior to the event, the deposit is non-refundable and if the customer cancels within 3 days of the event, 100% of the agreed-upon price of the event is due. Revenue is recognized, net of sales tax, at the time services are provided.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> For licensed truck sales, revenue is based on 6% of gross revenue from truck stop sales collected by the licensee. Revenue is recognized at the end of each month when the licensee is invoiced and the revenue is booked as a receivable.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>h.</em></strong></td> <td><strong><em>Advertising Costs</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Advertising costs, which are included in general and administrative expenses in the accompanying Statements of Operations, are expensed when incurred. These costs consist primarily of printing for signs, menus, and promotional items. Also included are costs of web based advertising. Total advertising expenses for the year ended December 31, 2013 and 2012 were $111,987 and $54,492, respectively.</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>i.</em></strong></td> <td><strong><em>Earnings (loss) per common share</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company utilizes the guidance per FASB Codification "ASC 260 "Earnings per Share". Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common shares and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon the conversion of convertible notes and the exercise of stock options and warrants (calculated using the modified-treasury stock method).&nbsp;Such securities, shown below, presented on a common share equivalent basis and outstanding as of December 31, 2013 and 2012 have been excluded from the per share computations:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">As of</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">December 31,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2012</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Convertible notes issued (Post-Reverse Merger)</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">1,650,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Convertible notes issued (Pre-Reverse Merger)</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,537,515</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Options issued to employee</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,000,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Warrants for services</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">2,752,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,900,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Warrants issued in connection with asset purchase</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">250,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Warrants issued in connection with convertible debt</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,760,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">825,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Warrants issued in connection with subscription agreements</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 104,000</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 9,386,000</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,912,515</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>j.</em></strong></td> <td><strong><em>Income Taxes</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company accounts for income taxes under FASB Codification Topic 740-10-25 ("ASC 740-10-25"). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Penalties and interest on underpayment of income taxes are reflected in the Company&#39;s effective tax rate.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>k.</em></strong></td> <td><strong><em>Sales Taxes</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company&#39;s revenues in the statements of income are net of sales taxes.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <em>&nbsp;</em></p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>l.</em></strong></td> <td><strong><em>Fair Value of Financial Instruments</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Effective January 1, 2008, the Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company&#39;s financial position or operating results, but did expand certain disclosures.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:</p> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0.5in">&nbsp;</td> <td style="WIDTH: 0.25in; TEXT-ALIGN: left">Level&nbsp;1:</td> <td style="TEXT-ALIGN: justify">Observable inputs such as quoted market prices in active markets for identical assets or liabilities</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 1.25in; TEXT-INDENT: -0.75in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0.5in">&nbsp;</td> <td style="WIDTH: 0.25in; TEXT-ALIGN: left">Level&nbsp;2:</td> <td style="TEXT-ALIGN: justify">Observable market-based inputs or unobservable inputs that are corroborated by market data</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 1.25in; TEXT-INDENT: -0.75in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0.5in">&nbsp;</td> <td style="WIDTH: 0.25in; TEXT-ALIGN: left">Level&nbsp;3:</td> <td style="TEXT-ALIGN: justify">Unobservable inputs for which there is little or no market data, which require the use of the reporting entity&#39;s own assumptions.</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company did not have any Level 2 or Level 3 assets or liabilities as of December 31, 2013, with the exception of its convertible notes payable. The carrying amounts of these liabilities at December 31, 2013 approximate their respective fair value based on the Company&#39;s incremental borrowing rate.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Cash is considered to be highly liquid and easily tradable as of December 31, 2013 and therefore classified as Level 1 within our fair value hierarchy.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>m.</em></strong></td> <td><strong><em>Convertible Instruments</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for "Accounting for Derivative Instruments and Hedging Activities".</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Professional standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a)&nbsp;the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b)&nbsp;the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c)&nbsp;a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.&nbsp;&nbsp;Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as "The Meaning of "Conventional Convertible Debt Instrument".</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when "Accounting for Convertible Securities with Beneficial Conversion Features," as those professional standards pertain to "Certain Convertible Instruments." Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> ASC 815-40 provides that, among other things, generally, if an event is not within the entity&#39;s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>n.</em></strong></td> <td><strong><em>Deferred Financing Costs</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Costs incurred with obtaining and executing debt arrangements are capitalized and amortized over the term of the related debt.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>o.</em></strong></td> <td><strong><em>Impairment of Long-Lived Assets</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In accordance with ASC 360 "Property, Plant, and Equipment", we periodically review our long-lived assets, including goodwill and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable.&nbsp;&nbsp;We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset.&nbsp;&nbsp;The amount of impairment is measured as the difference between the estimated fair value and the book value of the underlying asset. An impairment was necessary as of December 31, 2013. The Company fully impaired certain intellectual property comprised of trademarks, patents, domain names, technology rights, inventions etc. valued at $134,909 which was purchased on August 8, 2013 related to an asset purchase agreement. The impairment was recorded as impairment of intangible assets in the Company&#39;s accompanying consolidated statement of operations for the year ended December 2013. Since purchasing the intangible assets, the Company has not realized any benefit and management could not ascertain that the fair value of the intangibles would exceed their carrying value at December 31, 2013 and whether the intangible assets would generate positive cash flows for the foreseeable future. The Level of the fair value hierarchy used by management was Level 3. The intangible assets were remeasured on a non-recurring basis at December 31, 2013. The Company&#39;s executive management undertook to perform the analysis of the valuation of the intangible assets. The highest and best use of the intangible assets does not differ from their current or intended use.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> In addition, the Company purchased vehicles related to the asset purchase agreement dated August 8, 2013. The Company hired an appraiser to assess the value of the vehicles. The appraiser determined the value of the vehicles and the Company recorded an impairment of $142,309.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>p.</em></strong></td> <td><strong><em>Intangible Asset</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> In connection with the asset purchase agreement dated August 8, 2013 (see Note 17), the Company identified and recognized an intangible asset of $134,909 representing intellectual property comprised of trademarks, patents, domain names, technology rights, inventions etc. The Company fully impaired the intangible asset (see Note 3 o. - <em>Impairment of Long-Lived Assets)</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>q.</em></strong></td> <td><strong><em>Stock-Based Compensation</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company adopted the provisions of ASC 718.&nbsp;We estimate the fair value of stock options using a binomial model, consistent with the provisions of ASC 718 and SEC Staff Accounting Bulletin No.&nbsp;107,&nbsp; <em>Share-Based Payment</em> . Option-pricing models require the input of highly subjective assumptions, including the price volatility of the underlying stock.&nbsp;We determined that the use of implied volatility is expected to be more reflective of market conditions and, therefore, could reasonably be expected to be a better indicator of our expected volatility than historical volatility. The expected term assumption used in calculating the estimated fair value of our stock-based compensation awards using the binomial model is based on detailed historical data about employees&#39; exercise behavior, vesting schedules, and death and disability probabilities. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. We estimate the forfeiture rate based on historical experience of our stock-based awards that are granted, exercised and cancelled. We believe the resulting binomial calculation provides a more refined estimate of the fair value of our employee stock options. For our employee stock purchase plan, we decided to continue to use the Black-Scholes model to calculate the estimated fair value.</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>r.</em></strong></td> <td><strong><em>Reclassifications</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Certain reclassifications have been made to conform the prior period data to the current presentations. These reclassifications had no effect on the reported results.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong><em>s.</em></strong></td> <td><strong><em>Recently Issued Accounting Standards</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company&#39;s results of operations, financial position or cash flows.</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="FONT: 10pt Times New Roman, Times, Serif; TEXT-ALIGN: left; WIDTH: 0.25in"> <strong>3.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; TEXT-ALIGN: justify"> <strong>Summary of Significant Accounting Policies</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>a.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Basis of Consolidation</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant inter-company transactions are eliminated.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>b.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Basis of Accounting</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The balance sheet presented as of December 31, 2013 has been derived from our audited consolidated financial statements. The unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been omitted pursuant to those rules and regulations, but we believe that the disclosures are adequate to make the information presented not misleading. The unaudited consolidated financial statements and notes included herein should be read in conjunction with the annual consolidated financial statements and notes for the year ended December 31, 2013 included in our Annual Report on Form 10-K filed with the SEC on April 15, 2014.&nbsp;&nbsp;In the opinion of management, all adjustments, consisting of normal, recurring adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results of operations for the three-month period ended March 31, 2014 are not necessarily indicative of the results for the year ending December 31, 2014.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>c.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Cash and Cash Equivalents</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Cash primarily consists of cash on hand and bank deposits. The Company currently has no cash equivalents which would consist of money market accounts and other highly liquid investments with an original maturity of three months or less when purchased.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>d.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Use of Estimates in Preparation of Financial Statements</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 9pt; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results will differ from those estimates.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>e.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Property and Equipment</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Property and equipment are stated at cost. Depreciation is computed on the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 9%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 46%"> Computers</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 45%"> 4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Vehicles</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 4 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Office Equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Food Service Equipment</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Furniture and Fixtures</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td>&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> Leasehold Improvements</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt"> 7 Years</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Amortization of leasehold improvements is computed using the straight-line method over the shorter of the life of the lease or the estimated useful life of the assets. Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors. Based on this assessment there was an impairment at December 31, 2013 of $142,309.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>f.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Accounts Receivable</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Accounts receivable are generally unsecured. The majority of the Company&#39;s sales are in cash from truck stop sales. Receivables relate to catering and special event sales. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management&#39;s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>g.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Revenue Recognition</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company&#39;s revenue is derived from three sources. The primary source is from truck stop sales and lesser portions are from catering and event services and licensed truck sales. Truck stop sales are primarily received in cash and revenue for these sales, net of sales tax, is reported at that time.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> For catering and special event services, customers must sign and deliver the Company&#39;s standard catering agreement with a minimum payment of 50% of the agreed upon price of the event. The remaining balance is due by credit card payment within 2 days of the event or cash on the day of the event. The initial 50% deposit is fully refundable until 14 days prior to the event, between 4 and 13 days prior to the event, the deposit is non-refundable and if the customer cancels within 3 days of the event, 100% of the agreed-upon price of the event is due. Revenue is recognized, net of sales tax, at the time services are provided.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> For licensed truck sales, revenue is based on 6% of gross revenue from truck stop sales collected by the licensee. Revenue is recognized at the end of each month when the licensee is invoiced and the revenue is booked as a receivable.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>h.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Advertising Costs</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong>&nbsp;</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Advertising costs, which are included in general and administrative expenses in the accompanying Statements of Operations, are expensed when incurred. These costs consist primarily of printing for signs, menus, and promotional items. Also included are costs of web based advertising. Total advertising expenses for the three-month period ended March 31, 2014 and 2013 amounted to $25,307 and $12,588, respectively.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>i.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Earnings (loss) per common share</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company utilizes the guidance per FASB Codification "ASC 260 "Earnings per Share". Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common shares and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon the conversion of convertible notes and the exercise of stock options and warrants (calculated using the modified-treasury stock method).&nbsp;Such securities, shown below, presented on a common share equivalent basis and outstanding as of March 31, 2014 and 2013 have been excluded from the per share computations:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="6">As of</td> <td style="FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="6">March 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2014</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: bold 10pt Times New Roman, Times, Serif" colspan="2">2013</td> <td style="PADDING-BOTTOM: 1pt; FONT: bold 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 72%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Convertible notes issued (Post-Reverse Merger)</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 3,520,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="WIDTH: 11%; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 2,024,955</td> <td style="WIDTH: 1%; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Convertible notes issued (Pre-Reverse Merger)</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 1,537,515</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> Options issued to employee</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 1,000,000</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif">&nbsp;</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> -</td> <td style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> Warrants</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 5,470,500</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 2,912,478</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 2.5pt">&nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 9,990,500</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="PADDING-BOTTOM: 2.5pt; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT: 10pt Times New Roman, Times, Serif"> 6,474,948</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif"> &nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>j.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Income Taxes</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company accounts for income taxes under FASB Codification Topic 740-10-25 ("ASC 740-10-25"). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Penalties and interest on underpayment of income taxes are reflected in the Company&#39;s effective tax rate.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> <strong>&nbsp;</strong></p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>k.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify; WIDTH: 94%"> <strong><em>Sales Taxes</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company&#39;s revenues in the statements of income are net of sales taxes.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <em>&nbsp;</em></p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>l.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Fair Value of Financial Instruments</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Effective January 1, 2008, the Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company&#39;s financial position or operating results, but did expand certain disclosures.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 7%; TEXT-ALIGN: justify">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 6%"> Level 1:</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify; WIDTH: 87%"> Observable inputs such as quoted market prices in active markets for identical assets or liabilities</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 7%; TEXT-ALIGN: justify">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 6%"> Level 2:</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify; WIDTH: 87%"> Observable market-based inputs or unobservable inputs that are corroborated by market data</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.75in; TEXT-INDENT: -0.25in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 7%; TEXT-ALIGN: justify">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 6%"> Level 3:</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 0in; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify; WIDTH: 87%"> Unobservable inputs for which there is little or no market data, which require the use of the reporting entity&#39;s own assumptions.</td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company did not have any Level 2 or Level 3 assets or liabilities as March 31, 2014 and December 31, 2013, with the exception of its convertible notes payable. The carrying amounts of these liabilities at March 31, 2014 and December 31, 2013 approximate their respective fair value based on the Company&#39;s incremental borrowing rate.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <em>Additional Disclosures Regarding Fair Value Measurements</em></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The carrying value of cash and cash equivalents, accounts receivable, note receivable, other receivable, accounts payable and accrued expenses, notes payable, promissory notes and due from licensee- including related parties liabilities- approximate their fair value due to the short term maturity of these items.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> &nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>m.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Convertible Instruments</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for "Accounting for Derivative Instruments and Hedging Activities."</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Professional standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a)&nbsp;the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b)&nbsp;the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c)&nbsp;a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.&nbsp;&nbsp;Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as "The Meaning of "Conventional Convertible Debt Instrument."</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when "Accounting for Convertible Securities with Beneficial Conversion Features," as those professional standards pertain to "Certain Convertible Instruments." Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> ASC 815-40 provides that, among other things, generally, if an event is not within the entity&#39;s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>n.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Deferred Financing Costs</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> Costs incurred with obtaining and executing debt arrangements are capitalized and amortized over the term of the related debt using the effective interest method.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>o.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Impairment of Long-Lived Assets</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> <strong><em>&nbsp;</em></strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> In accordance with ASC 360 "Property, Plant, and Equipment", we periodically review our long-lived assets, including goodwill and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable.&nbsp;&nbsp;We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset.&nbsp;&nbsp;The amount of impairment is measured as the difference between the estimated fair value and the book value of the underlying asset. An impairment was necessary as of December 31, 2013. The Company fully impaired certain intellectual property comprised of trademarks, patents, domain names, technology rights, inventions etc. valued at $134,909 which was purchased on August 8, 2013 related to an asset purchase agreement. The impairment was recorded as impairment of intangible assets in the Company&#39;s accompanying consolidated statement of operations for the year ended December 2013. Since purchasing the intangible assets, the Company has not realized any benefit and management could not ascertain that the fair value of the intangibles would exceed their carrying value at December 31, 2013 and whether the intangible assets would generate positive cash flows for the foreseeable future. The Level of the fair value hierarchy used by management was Level 3. The intangible assets were remeasured on a non-recurring basis at December 31, 2013. The Company&#39;s executive management undertook to perform the analysis of the valuation of the intangible assets. The highest and best use of the intangible assets does not differ from their current or intended use.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white"> In addition, the Company purchased vehicles related to the asset purchase agreement dated August 8, 2013. The Company hired an appraiser to assess the value of the vehicles. The appraiser determined the value of the vehicles and the Company recorded an impairment of $142,309 at December 31, 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; BACKGROUND-COLOR: white; TEXT-INDENT: 0px"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>p.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Intangible Asset</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> In connection with the asset purchase agreement dated August 8, 2013 (see Note 15), the Company identified and recognized an intangible asset of $134,909 representing intellectual property comprised of trademarks, patents, domain names, technology rights, inventions etc. The Company fully impaired the intangible asset at December 31, 2013 (see Note 3 o. - <em>Impairment of Long-Lived Assets).</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>q.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Stock-Based Compensation</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company adopted the provisions of ASC 718.&nbsp;We estimate the fair value of stock options using a binomial model, consistent with the provisions of ASC 718 and SEC Staff Accounting Bulletin No.&nbsp;107,&nbsp;<em>Share-Based Payment</em>. Option-pricing models require the input of highly subjective assumptions, including the price volatility of the underlying stock.&nbsp;We determined that the use of implied volatility is expected to be more reflective of market conditions and, therefore, could reasonably be expected to be a better indicator of our expected volatility than historical volatility. The expected term assumption used in calculating the estimated fair value of our stock-based compensation awards using the binomial model is based on detailed historical data about employees&#39; exercise behavior, vesting schedules, and death and disability probabilities. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. We estimate the forfeiture rate based on historical experience of our stock-based awards that are granted, exercised and cancelled. We believe the resulting binomial calculation provides a more refined estimate of the fair value of our employee stock options. For our employee stock purchase plan, we decided to continue to use the Black-Scholes model to calculate the estimated fair value.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>r.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Reclassifications</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> Certain reclassifications have been made to conform the prior period data to the current presentations. These reclassifications had no effect on the reported results.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong><em>s.</em></strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Recently Issued Accounting Standards</em></strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company&#39;s results of operations, financial position or cash flows.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> -2216230 -4876431 20007 -5145318 8443 11802 3000 79186 3028545 17966 -2303859 -7916778 -959 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0px">&nbsp;</td> <td style="WIDTH: 0.5in; TEXT-ALIGN: left"> <strong>13.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Stockholders&#39; Deficit</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Preferred Stock</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company is authorized to issue 10,000,000 shares of preferred stock consisting of 1,000,000 shares of Series A Convertible Preferred Stock $0.001 par value per share ("Series A Preferred Stock"), and 9,000,000 shares of blank check preferred stock, $0.001 par value per share.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> All the outstanding Series A Preferred Stock at that time shall automatically be converted into shares of Common Stock upon the earlier of (i) one year from the date of initial issuance of any shares of the Series A Preferred Stock at a conversion rate equal to $0.50 per share of Common Stock or (ii) the effectiveness of a registration statement filed with the SEC covering the resale of Common Stock issued by the Company in its next PIPE transaction (the "PIPE").&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> As of December 31, 2013 and 2012, no preferred stock was issued and outstanding.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Common Stock</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company is authorized to issue 100,000,000 shares of Common Stock.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> As noted earlier in note 1, the Company consummated the transactions contemplated by the Exchange Agreement that resulted in a reverse merger and a change in control of the Company. The 3,322,500 shares of the Company outstanding prior to the closing of the merger and issued an additional 5,120,000 shares issued in connection with the merger are treated as having been issued as of the merger date on October 18, 2012.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Prior to the closing of the Share Exchange Transaction, the Company had 3,322,500 shares of Common Stock issued and outstanding which were treated as having been issued as of the date of the Share Exchange Transaction.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In October 2012, in connection with the Share Exchange Transaction, the Company issued an aggregate of 5,120,000 shares of its Common Stock in exchange for existing shares of Grilled Cheese, which are treated as having been issued as of the date of the Share Exchange Transaction.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Pursuant to the final closing of the 2012 Private Placement Offering on April 18, 2013, 270,500 common shares were issued to a number of consultants based on the share price of $1.00 as established by the private offering. The Company also issued warrants to purchase up to an aggregate of 287,500 shares of Common Stock to the Placement Agents. The warrants have an exercise price of $2.40 per share and are exercisable for a term of five (5) years from the closing of the 2012 Private Placement Offering.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Pursuant to the final closing of the 2013 Private Placement Offering on June 21, 2013, the Company also issued warrants to purchase up to an aggregate of 64,500 shares of Common Stock to the Placement Agents. The warrants have an exercise price of $2.40 per share and are exercisable for a term of five (5) years from the closing of the 2013 Private Placement Offering.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In April 2013, the Company issued to a consultant 473,000 shares of Common Stock valued at $1.00 per share for services rendered.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In May 2013, the Company issued 1,696,834 shares of its Common Stock as a result of converting $512,500 of principal and $52,545 of interest of its pre reverse merger convertible note holders (see note 7).</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In August 2013, the Company issued 500,000 shares issued at $1.00 per share in connection with the asset purchase agreement (see note 17).</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In September 2013, the Company issued to two consultants a total of 47,500 shares of Common Stock valued at $1.00 per share for services rendered. In addition, the Company issued 56,571 shares of common stock valued at $1.00 per share in satisfaction of accounts payable totaling $56,571.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On October 8, 2013, the Company commenced an offering of up to $5,000,000 representing 4,000,000 Units for $1.25 per unit. Each Unit consists of: (i) one share (the "Shares") of Company common stock, par value $<font style="BACKGROUND-COLOR: white">0.001 per share</font>&nbsp;("Common Stock") and (ii) a warrant (the "Warrants") to purchase one share of Common Stock (the "Warrant Shares"). The Warrants may be exercised until October 31, 2016 at an exercise price of $2.50 per Warrant Share.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Through December 31, 2013, the Company issued 104,000 shares of common stock in connection with such closings.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On December 31, 2013, the Company converted a $100,000 note to 200,000 shares and $1,176 of interest to 2,353 shares at a price of $0.50 per share.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On December 31, 2013, the Company issued 8,000 valued at $1.25 per share in connection with the issuance of a promissory note totaling $40,000.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> As of December 31, 2013 and 2012, there were 11,801,257 and 8,442,500 shares of Common Stock issued and outstanding, respectively.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> <strong>Stock Compensation Plan</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> During September 2013, the Company adopted the 2013 Equity Plan ("2013 Plan"). An aggregate of 4,000,000 shares of our common stock are reserved for issuance under the 2013 Plan. The 2013 Plan may be administered, interpreted and constructed by the Board or a committee designated by the Board (the "Designee"). The 2013 Plan allows the Designee to grant stock options to employees, directors, senior management and consultants (under certain circumstances described in the 2013 Plan).</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;During the year ended December 31, 2013, the Company recorded share-based payment expenses amounting to $82,394, in connection with all options outstanding. The amortization of share-based payment was recorded in general and administrative expenses during 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The Company granted 1,000,000 options in September 2013, as follows: <font style="BACKGROUND-COLOR: white">(i) 250,000 options with an exercise price of $2.00 per share (ii) 250,000 options with an exercise price of $3.00 per share (iii) 250,000 options with an exercise price of $4.00 per share, and (iv) 250,000 options with an exercise price of $5.00 per share. Each of the options are exercisable for a term of 10 years.</font> These were the only options granted during the year ended December 31, 2013.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The fair value of the options granted during the year ended December 31, 2013 are based on the Black Scholes Model using the following assumptions:&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 60%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 85%">Exercise price:</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">1.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Market price at date of grant:</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1.00</td> <td style="TEXT-ALIGN: left">(1)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Volatility:</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">80</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Expected dividend rate:</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">0</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Expected terms (years):</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">10</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Risk-free interest rate:</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">0.03</td> <td style="TEXT-ALIGN: left">%</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> (1) The Company used fair value of the Company&#39;s common stock as the market price to value stock options which were granted. The fair value was determined based on valuation performed by Management, which took into consideration, where applicable, cash received , market participant inputs, estimated cash flows based on entity specific criteria, purchase multiples paid in other comparable third-party transactions, market conditions, liquidity, operating results and other qualitative and quantitative factors. <font style="BACKGROUND-COLOR: white">The fair value of the Company&#39;s common stock on each grant date are adjusted to estimated fair value and the volatility in general economic conditions, stock markets, earnings or revenue multiples of comparable companies and other qualitative and quantitative factors may result in significant changes in the estimated fair value of the Company&#39;s common stock from period to period.</font></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> A summary of the activity during 2013 of the Company&#39;s stock option plan is presented below:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Options</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Weighted&nbsp;<br /> Average&nbsp;<br /> Exercise&nbsp;Price</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Aggregate&nbsp;<br /> Intrinsic&nbsp;<br /> Value</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> <td>&nbsp;</td> <td colspan="2">&nbsp;</td> <td>&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Outstanding at January 1, 2013</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 55%">Granted</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">1,000,000</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">3.50</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 1%">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> <td style="WIDTH: 12%; TEXT-ALIGN: right">&nbsp;</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Exercised</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Expired or cancelled</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Outstanding at December 31, 2013</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td style="TEXT-ALIGN: right">1,000,000</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">3.50</td> <td style="TEXT-ALIGN: left">&nbsp;</td> <td>&nbsp;</td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">&nbsp;&nbsp;-</td> <td style="TEXT-ALIGN: left">&nbsp;</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The total compensation cost related to options not yet recognized amounted to approximately $566,675&nbsp;at December 31, 2013 and the Company expects that it will be recognized over the remaining period of 32 months.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 0.25in"> <strong>12.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; TEXT-ALIGN: justify"> <strong>Stockholders&#39; Deficit</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Preferred Stock</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company is authorized to issue 10,000,000 shares of preferred stock consisting of 1,000,000 shares of Series A Convertible Preferred Stock $0.001 par value per share ("Series A Preferred Stock"), and 9,000,000 shares of blank check preferred stock, $0.001 par value per share.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Outstanding shares of Series A Preferred Stock, if any, shall automatically be converted into shares of Common Stock upon the earlier of (i) one year from the date of initial issuance of any shares of the Series A Preferred Stock at a conversion rate equal to $0.50 per share of Common Stock or (ii) the effectiveness of a registration statement filed with the SEC covering the resale of Common Stock issued by the Company in its next PIPE transaction (the "PIPE").&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> As of March 31, 2014 and December 31, 2013, no preferred stock was issued and outstanding.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Common Stock</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company is authorized to issue 100,000,000 shares of Common Stock.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Shares issued pursuant to Subscription Agreements</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>&nbsp;</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company generated gross proceeds of $740,000 by issuing 592,000 shares of its Common Stock pursuant to subscription agreements during the three-month period ended March 31, 2014.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Shares issued</strong> <strong>pursuant to Settlement of Promissory Notes and Accounts payable</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company satisfied its obligations under $37,500 and $12,500 promissory notes and promissory notes-related party and accrued interest by issuing 100,000 shares of its Common Stock valued at $125,000 during the three-month period ended March 31, 2014.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company satisfied its obligations under a $19,985 accounts payable by issuing 20,209 shares of its Common Stock valued at $25,262 during the three-month period ended March 31, 2014.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> <strong>Stock Compensation Plan</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> During September 2013, the Company adopted the 2013 Equity Plan ("2013 Plan"). An aggregate of 4,000,000 shares of our Common Stock are reserved for issuance under the 2013 Plan. The 2013 Plan may be administered, interpreted and constructed by the Board or a committee designated by the Board (the "Designee"). The 2013 Plan allows the Designee to grant stock options to employees, directors, senior management and consultants (under certain circumstances described in the 2013 Plan).</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The Company recorded share-based payment expenses amounting to $53,348 during the three-month period ended March 31, 2014 in connection with all options outstanding. The amortization of share-based payment was recorded in general and administrative expenses.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The Company granted 1,000,000 options in September 2013, as follows: (i) 250,000 options with an exercise price of $2.00 per share (ii) 250,000 options with an exercise price of $3.00 per share (iii) 250,000 options with an exercise price of $4.00 per share, and (iv) 250,000 options with an exercise price of $5.00 per share. Each of the options are exercisable for a term of 10 years. These were the only options granted and outstanding at March 31, 2014 and December 31, 2013, respectively.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white"> The total compensation cost related to options not yet recognized amounted to approximately $513,327&nbsp;at March 31, 2014 and the Company expects that it will be recognized over the remaining period of 29 months.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; BACKGROUND-COLOR: white; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> 500000 5120000 1896833 270500 473000 47500 22500 25000 696000 104000 8000 1000000 1000000 45000 500000 500000 500000 50000 50000 499500 500 500000 663148 1897 665045 60000 24975 25 25000 40000 500000 500000 500000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0.25in; TEXT-ALIGN: left"> <strong>18.</strong></td> <td style="TEXT-ALIGN: justify"> <strong>Subsequent&nbsp;Events</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company evaluated subsequent events through the date the consolidated financial statements were available to be issued as follows:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em><u>Sale of common stock:</u></em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On October 8, 2013, the Company commenced an offering of up to $5,000,000 representing 4,000,000 Units for $1.25 per unit. Each Unit consists of: (i) one share of Company common stock, par value $ 0.001 per share and (ii) a warrant to purchase one share of Common Stock. The Warrants may be exercised until October 31, 2016 at an exercise price of $2.50 per Warrant Share. The Company may, in its sole discretion, increase the size of the offering up to an additional $750,000. There is no minimum amount that must be raised prior to closing. The terms of the Offering, as amended, provide that the Offering will terminate on the earlier of the sale of the maximum offering amount or February 28, 2014, unless extended by the Company for an additional three (3) thirty (30) day periods. On February 28, 2014, the Company exercised the first thirty day extension. The Offering is being made pursuant to Rule 506(c) of Regulation D of the Securities Act of 1933, as amended and the JOBS Act.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <font style="COLOR: #222222">From&nbsp;</font> December 20, 2013 through April 14, 2014 <font style="COLOR: #222222">, the Company closed on an aggregate amount of $870,000 from 31 accredited investors and will issue an aggregate of 696,000 shares of common stock and 696,000 warrants in connection with such closings.</font></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em><u>Issuance of notes payable:</u></em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <em>&nbsp;&nbsp;</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In February 2014, the Company entered into an unsecured convertible promissory note totaling $50,000 bearing interest at 10% per annum. The note was due on the closing of the Company&#39;s current private placement offering and has been repaid in full.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In February 2014, the Company entered into a promissory note totaling $25,000 bearing interest at 3.25% per annum. The note was due on March 29, 2014 and has been repaid in full.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em><u>Sale of Vehicles:</u></em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <em>&nbsp;</em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> During January 2014, the Company sold two vehicles totaling $77,390.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em><u>Promissory Notes</u></em></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <em>&nbsp;</em></p> <p style="MARGIN-BOTTOM: 0px; TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0in; MARGIN-TOP: 0px; TEXT-INDENT: 0in"> At December 31, 2013, the Company had three secured promissory notes totaling $37,500 in default. At January 23, 2014, the Company reached settlements with the promissory note holders. The Company satisfied its obligations under such promissory notes by issuing 75,000 shares of its common stock as well as 9,375 warrants. The fair value attributed to the consideration given by the Company to satisfy such obligations was based on the pricing of its subscription agreement (which are priced at $1.25 per share including the warrant) which is contemporaneous to this transaction. The excess of the fair value of the consideration given by the Company, which amounted to $93,750, over the carrying value of the promissory notes and related interest payable, which amounted to $42,852, will be recognized as interest expense in its 2014 financial statements.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> &nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em><u>Promissory Notes - Related Party</u></em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> At December 31, 2013, the Company had a secured promissory note totaling $12,500 with Chord Advisors, LLC that was in default. At January 23, 2014, the Company reached a settlement with the promissory note holder. The Company satisfied its obligations under such promissory notes by issuing 25,000 shares of its common stock as well as 3,125 warrants. The fair value attributed to the consideration given by the Company to satisfy such obligations was based on the pricing of its subscription agreement (which are priced at $1.25 per share including the warrants) which is contemporaneous to this transaction. The excess of the fair value of the consideration given by the Company, which amounted to $31,250, over the carrying value of the promissory notes and related interest payable, which amounted to $14,002, will be recognized as interest expense in its 2014 financial statements.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <em><u>Others</u></em></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On April 7, 2014, the Company entered into a consulting agreement with Undiscovered Equities, Inc., whereby Undiscovered Equities will provide certain advisory services to the Company. The consulting agreement became effective on April 8, 2014 and will terminate on May 7, 2014, provided that the term may be extended by mutual agreement of the parties. In connection with the services, the Company will pay to Undiscovered Equities, Inc. a one-time cash fee of $7,500 and a one-time issuance of 50,000 restricted shares of the Company&#39;s common stock.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;&nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On April 11, 2014, the Company entered into an advisory agreement with PBNJ Advisors, Inc., whereby PBNJ Advisors will provide certain advisory services to the Company. The advisory agreement became effective on April 11, 2014 and will terminate on December 31, 2014, provided that the term may be extended by mutual agreement of the parties. In connection with the services, the Company will pay to PBNJ Advisors: (i) a monthly cash payment of $5,600, for an aggregate annual payment of $67,200, with such monthly payments to commence retroactively as of January 1, 2014, (ii) a one-time issuance of 50,000 shares of restricted common stock of the Company, (iii) a one-time grant of warrants to purchase 100,000 shares of common stock, exercisable for a period of 3 years at a price of $2.00 per share, and (iv) up to $400 a month for health insurance. The advisory agreement shall terminate upon (i) the expiration of the term, or (ii) by the Company for cause.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On April 11, 2014, Mr. Nicholas Koutsivitis submitted his resignation as the Company&#39;s Treasurer, effective immediately following filing this Annual Report. As a result, Mr. Goldstein was appointed, and will assume the role of Treasurer effective immediately following the filing of this Annual Report. &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &nbsp;</p> <!-- Field: Page; Sequence: 43; Options: Last --> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0in">&nbsp;</td> <td style="WIDTH: 0.25in; TEXT-ALIGN: left"> <strong>16.</strong></td> <td style="TEXT-ALIGN: justify"> <strong>Subsequent&nbsp;Events</strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company evaluated subsequent events through the date the unaudited consolidated financial statements were available to be issued as follows:</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> On April 7, 2014, the Company entered into a consulting agreement with Undiscovered Equities, Inc., whereby Undiscovered Equities will provide certain advisory services to the Company. The consulting agreement became effective on April 8, 2014 and terminated on May 7, 2014. In connection with the services, the Company will pay to Undiscovered Equities, Inc. a one-time cash fee of $7,500 and a one-time issuance of 50,000 restricted shares of the Company&#39;s Common Stock.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On April 11, 2014, the Company entered into an advisory agreement with PBNJ Advisors, Inc., whereby PBNJ Advisors will provide certain advisory services to the Company. The advisory agreement became effective on April 11, 2014 and will terminate on December 31, 2014, provided that the term may be extended by mutual agreement of the parties. In connection with the services, the Company will pay to PBNJ Advisors: (i) a monthly cash payment of $5,600, for an aggregate annual payment of $67,200, with such monthly payments to commence retroactively as of January 1, 2014, (ii) a one-time issuance of 50,000 shares of restricted Common Stock of the Company, (iii) a one-time grant of warrants to purchase 100,000 shares of Common Stock, exercisable for a period of 3 years at a price of $2.00 per share, and (iv) up to $400 a month for health insurance. The advisory agreement shall terminate upon (i) the expiration of the term, or (ii) by the Company for cause.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On April 11, 2014, Mr. Nicholas Koutsivitis submitted his resignation as the Company&#39;s Treasurer, effective immediately following filing the Company&#39;s Annual Report. As a result, Mr. Goldstein was appointed, and will assume the role of Treasurer effective immediately following the filing of the Company&#39;s Annual Report. &nbsp;</p> <!--EndFragment--></div> </div> 142309 142309 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in">&nbsp;</td> <td style="WIDTH: 0.25in"><strong>d.</strong></td> <td><strong><em>Use of Estimates in Preparation of Financial Statements</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 9pt; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: 0.5in"> &nbsp;</p> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 3%">&nbsp;</td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 3%"> <strong>d.</strong></td> <td style="FONT: 10pt Times New Roman, Times, Serif; PADDING-RIGHT: 0.8pt; WIDTH: 94%"> <strong><em>Use of Estimates in Preparation of Financial Statements</em></strong></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 9pt; TEXT-INDENT: 0.5in"> &nbsp;</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results will differ from those estimates.</p> <!--EndFragment--></div> </div> -1764000 -382000 29900 50391 30955 259119 11998 600 1800 1799 1798 5999 2401 3598 2400 26395 4799 128993 23996 133277 10176514 8442500 12169473 8442500 xbrli:shares iso4217:USD xbrli:pure iso4217:USD xbrli:shares iso4217:USD trig:Warrant 0001497647 trig:UndiscoveredEquitiesIncMember us-gaap:SubsequentEventMember 2014-04-07 2014-05-07 0001497647 trig:PbnjAdvisorsMember us-gaap:SubsequentEventMember 2014-04-01 2014-04-11 0001497647 us-gaap:NotesPayableOtherPayablesMember us-gaap:SubsequentEventMember 2014-02-01 2014-02-28 0001497647 us-gaap:WarrantMember 2014-01-01 2014-03-31 0001497647 us-gaap:WarrantMember us-gaap:MinimumMember 2014-01-01 2014-03-31 0001497647 us-gaap:WarrantMember us-gaap:MaximumMember 2014-01-01 2014-03-31 0001497647 us-gaap:WarrantMember 2014-01-01 2014-03-31 0001497647 us-gaap:VehiclesMember 2014-01-01 2014-03-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierTwoMember 2014-01-01 2014-03-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierOneMember 2014-01-01 2014-03-31 0001497647 us-gaap:SeriesAPreferredStockMember 2014-01-01 2014-03-31 0001497647 trig:ShareBasedCompensationEquityPlanMember 2014-01-01 2014-03-31 0001497647 trig:TransactionTwoMember 2014-01-01 2014-03-31 0001497647 trig:TransactionOneMember 2014-01-01 2014-03-31 0001497647 us-gaap:OfficeEquipmentMember 2014-01-01 2014-03-31 0001497647 us-gaap:NotesReceivableMember 2014-01-01 2014-03-31 0001497647 us-gaap:NonsoftwareLicenseArrangementMember 2014-01-01 2014-03-31 0001497647 us-gaap:LeaseholdImprovementsMember 2014-01-01 2014-03-31 0001497647 trig:ConvertibleNotesPayableTwoMember 2014-01-01 2014-03-31 0001497647 trig:RelatedPartySecuredPromissoryNotePayableMember 2014-01-01 2014-03-31 0001497647 trig:FoodServiceEquipmentMember 2014-01-01 2014-03-31 0001497647 trig:ClarkGroupAgreementMember 2014-01-01 2014-03-31 0001497647 trig:ChordAdvisorsAgreementMember 2014-01-01 2014-03-31 0001497647 trig:VillardAdvisoryAgreementMember 2014-01-01 2014-03-31 0001497647 trig:GrandviewAdvisoryAgreementMember 2014-01-01 2014-03-31 0001497647 trig:TrilogyIrAgreementMember 2014-01-01 2014-03-31 0001497647 trig:TrigCapitalAdvisoryAgreementMember 2014-01-01 2014-03-31 0001497647 trig:SecuredPromissoryNotePayableOneMember 2014-01-01 2014-03-31 0001497647 us-gaap:FurnitureAndFixturesMember 2014-01-01 2014-03-31 0001497647 us-gaap:EmployeeStockOptionMember 2014-01-01 2014-03-31 0001497647 us-gaap:ConvertibleNotesPayableMember 2014-01-01 2014-03-31 0001497647 us-gaap:ComputerEquipmentMember 2014-01-01 2014-03-31 0001497647 2014-01-01 2014-03-31 0001497647 trig:ChordAdvisorsAgreementMember us-gaap:ConvertibleNotesPayableMember us-gaap:SubsequentEventMember 2014-01-01 2014-01-31 0001497647 us-gaap:ConvertibleNotesPayableMember us-gaap:SubsequentEventMember 2014-01-01 2014-01-31 0001497647 us-gaap:WarrantMember us-gaap:SubsequentEventMember 2013-12-20 2014-04-14 0001497647 us-gaap:SubsequentEventMember 2013-12-20 2014-04-14 0001497647 trig:PromissoryNoteMember us-gaap:CommonStockMember 2013-12-01 2013-12-31 0001497647 trig:UnsecuredPromissoryNotePayableMember 2013-12-01 2013-12-31 0001497647 us-gaap:NotesPayableOtherPayablesMember us-gaap:CommonStockMember 2013-12-01 2013-12-31 0001497647 us-gaap:InternetDomainNamesMember 2013-11-01 2013-11-13 0001497647 us-gaap:WarrantMember 2013-10-07 2013-12-31 0001497647 us-gaap:WarrantMember 2013-09-08 2013-10-08 0001497647 trig:UnitsMember 2013-09-08 2013-10-08 0001497647 us-gaap:StockOptionMember trig:ShareBasedCompensationEquityPlanMember 2013-09-01 2013-09-30 0001497647 trig:ShareBasedCompensationEquityPlanMember 2013-09-01 2013-09-30 0001497647 trig:ConsultantMember us-gaap:CommonStockMember 2013-09-01 2013-09-30 0001497647 trig:StockOptionFourMember trig:ShareBasedCompensationEquityPlanMember 2013-09-01 2013-09-30 0001497647 trig:StockOptionThreeMember trig:ShareBasedCompensationEquityPlanMember 2013-09-01 2013-09-30 0001497647 trig:StockOptionTwoMember trig:ShareBasedCompensationEquityPlanMember 2013-09-01 2013-09-30 0001497647 us-gaap:CommonStockMember 2013-09-01 2013-09-30 0001497647 us-gaap:WarrantMember 2013-08-06 2013-09-06 0001497647 trig:AssetPurchaseAgreementMember us-gaap:CommonStockMember 2013-08-01 2013-08-31 0001497647 trig:AssetPurchaseAgreementMember us-gaap:WarrantMember 2013-07-08 2013-08-08 0001497647 trig:AssetPurchaseAgreementMember 2013-07-08 2013-08-08 0001497647 trig:UnitsMember 2013-07-08 2013-08-08 0001497647 2013-07-08 2013-08-08 0001497647 us-gaap:WarrantMember 2013-05-25 2013-06-25 0001497647 us-gaap:WarrantMember 2013-05-21 2013-06-21 0001497647 us-gaap:PrivatePlacementMember us-gaap:CommonStockMember 2013-05-21 2013-06-21 0001497647 trig:ConvertibleNotesPayableTwoMember 2013-05-21 2013-06-21 0001497647 us-gaap:ConvertibleNotesPayableMember 2013-05-01 2013-05-31 0001497647 us-gaap:CommonStockMember 2013-05-01 2013-05-31 0001497647 trig:ConsultantMember us-gaap:CommonStockMember 2013-04-01 2013-04-30 0001497647 us-gaap:PrivatePlacementMember us-gaap:CommonStockMember 2013-03-19 2013-04-18 0001497647 trig:TransactionTwoMember us-gaap:WarrantMember 2013-03-19 2013-04-18 0001497647 trig:TransactionOneMember us-gaap:WarrantMember 2013-03-19 2013-04-18 0001497647 trig:ConvertibleNotesPayableTwoMember 2013-03-19 2013-04-18 0001497647 us-gaap:WarrantMember 2013-03-17 2013-04-17 0001497647 us-gaap:WarrantMember 2013-03-05 2013-04-04 0001497647 us-gaap:WarrantMember 2013-02-28 2013-03-28 0001497647 us-gaap:WarrantMember 2013-02-22 2013-03-22 0001497647 us-gaap:WarrantMember 2013-02-04 2013-03-04 0001497647 us-gaap:WarrantMember 2013-01-16 2013-02-15 0001497647 us-gaap:WarrantMember 2013-01-01 2013-12-31 0001497647 us-gaap:WarrantMember us-gaap:MinimumMember 2013-01-01 2013-12-31 0001497647 us-gaap:WarrantMember us-gaap:MaximumMember 2013-01-01 2013-12-31 0001497647 us-gaap:WarrantMember 2013-01-01 2013-12-31 0001497647 us-gaap:VehiclesMember 2013-01-01 2013-12-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierTwoMember 2013-01-01 2013-12-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierOneMember 2013-01-01 2013-12-31 0001497647 us-gaap:StockOptionMember trig:DeepakDevarajMember 2013-01-01 2013-12-31 0001497647 us-gaap:SeriesAPreferredStockMember 2013-01-01 2013-12-31 0001497647 us-gaap:AdditionalPaidInCapitalMember 2013-01-01 2013-12-31 0001497647 trig:OfferingMember us-gaap:CommonStockMember 2013-01-01 2013-12-31 0001497647 trig:AftMember 2013-01-01 2013-12-31 0001497647 trig:WarrantIssuanceThreeMember 2013-01-01 2013-12-31 0001497647 us-gaap:RetainedEarningsMember 2013-01-01 2013-12-31 0001497647 us-gaap:PreferredStockMember 2013-01-01 2013-12-31 0001497647 trig:ShareBasedCompensationEquityPlanMember 2013-01-01 2013-12-31 0001497647 trig:WarrantIssuanceOneMember 2013-01-01 2013-12-31 0001497647 trig:AssetPurchaseAgreementTwoMember 2013-01-01 2013-12-31 0001497647 trig:AssetPurchaseAgreementMember 2013-01-01 2013-12-31 0001497647 trig:ExercisePriceRangeOneMember 2013-01-01 2013-12-31 0001497647 trig:AmendedClarkGroupAgreementMember 2013-01-01 2013-12-31 0001497647 trig:DeepakDevarajMember 2013-01-01 2013-12-31 0001497647 trig:PeterGoldsteinMember 2013-01-01 2013-12-31 0001497647 trig:AmendedLeeAgreementMember 2013-01-01 2013-12-31 0001497647 trig:StockOptionFourMember trig:DeepakDevarajMember 2013-01-01 2013-12-31 0001497647 trig:StockOptionThreeMember trig:DeepakDevarajMember 2013-01-01 2013-12-31 0001497647 trig:StockOptionTwoMember trig:DeepakDevarajMember 2013-01-01 2013-12-31 0001497647 us-gaap:OfficeEquipmentMember 2013-01-01 2013-12-31 0001497647 us-gaap:NotesReceivableMember 2013-01-01 2013-12-31 0001497647 us-gaap:NonsoftwareLicenseArrangementMember 2013-01-01 2013-12-31 0001497647 us-gaap:ManagementMember 2013-01-01 2013-12-31 0001497647 us-gaap:LeaseholdImprovementsMember 2013-01-01 2013-12-31 0001497647 trig:WarrantIssuanceTwoMember 2013-01-01 2013-12-31 0001497647 trig:ConvertibleNotesPayableTwoMember 2013-01-01 2013-12-31 0001497647 trig:RelatedPartySecuredPromissoryNotePayableMember 2013-01-01 2013-12-31 0001497647 trig:FoodServiceEquipmentMember 2013-01-01 2013-12-31 0001497647 trig:RobertLeeMember 2013-01-01 2013-12-31 0001497647 trig:ClarkGroupAgreementMember 2013-01-01 2013-12-31 0001497647 trig:TrilogyCapitalStockPurchaseAgreementMember us-gaap:PresidentMember 2013-01-01 2013-12-31 0001497647 trig:TrilogyCapitalStockPurchaseAgreementMember trig:RobertLeeMember 2013-01-01 2013-12-31 0001497647 trig:TrilogyCapitalStockPurchaseAgreementMember 2013-01-01 2013-12-31 0001497647 trig:CohenAdvisoryAgreementMember 2013-01-01 2013-12-31 0001497647 trig:ChordAdvisorsAgreementMember 2013-01-01 2013-12-31 0001497647 trig:VillardAdvisoryAgreementMember 2013-01-01 2013-12-31 0001497647 trig:GrandviewAdvisoryAgreementMember us-gaap:MinimumMember 2013-01-01 2013-12-31 0001497647 trig:GrandviewAdvisoryAgreementMember us-gaap:MaximumMember 2013-01-01 2013-12-31 0001497647 trig:GrandviewAdvisoryAgreementMember 2013-01-01 2013-12-31 0001497647 trig:TrilogyIrAgreementMember 2013-01-01 2013-12-31 0001497647 trig:TrigCapitalAdvisoryAgreementMember 2013-01-01 2013-12-31 0001497647 trig:SecuredPromissoryNotePayableOneMember 2013-01-01 2013-12-31 0001497647 us-gaap:FurnitureAndFixturesMember 2013-01-01 2013-12-31 0001497647 us-gaap:EmployeeStockOptionMember 2013-01-01 2013-12-31 0001497647 us-gaap:EmployeeStockOptionMember 2013-01-01 2013-12-31 0001497647 us-gaap:ConvertibleNotesPayableMember 2013-01-01 2013-12-31 0001497647 us-gaap:ConvertibleDebtMember 2013-01-01 2013-12-31 0001497647 us-gaap:ComputerEquipmentMember 2013-01-01 2013-12-31 0001497647 us-gaap:CommonStockMember 2013-01-01 2013-12-31 0001497647 2013-01-01 2013-12-31 0001497647 us-gaap:WarrantMember 2013-01-01 2013-03-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SuppliersTwoAndThreeMember 2013-01-01 2013-03-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierTwoMember 2013-01-01 2013-03-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierOneMember 2013-01-01 2013-03-31 0001497647 trig:ConvertibleNotesPayableTwoMember 2013-01-01 2013-03-31 0001497647 trig:ClarkGroupAgreementMember 2013-01-01 2013-03-31 0001497647 trig:CohenAdvisoryAgreementMember 2013-01-01 2013-03-31 0001497647 trig:ChordAdvisorsAgreementMember 2013-01-01 2013-03-31 0001497647 trig:VillardAdvisoryAgreementMember 2013-01-01 2013-03-31 0001497647 trig:GrandviewAdvisoryAgreementMember 2013-01-01 2013-03-31 0001497647 trig:TrilogyIrAgreementMember 2013-01-01 2013-03-31 0001497647 trig:TrigCapitalAdvisoryAgreementMember 2013-01-01 2013-03-31 0001497647 us-gaap:EmployeeStockOptionMember 2013-01-01 2013-03-31 0001497647 us-gaap:ConvertibleNotesPayableMember 2013-01-01 2013-03-31 0001497647 2013-01-01 2013-03-31 0001497647 us-gaap:WarrantMember 2012-12-28 2013-01-28 0001497647 us-gaap:WarrantMember 2012-12-15 2013-01-15 0001497647 us-gaap:WarrantMember 2012-12-10 2013-01-10 0001497647 us-gaap:WarrantMember 2012-11-20 2012-12-19 0001497647 trig:ConvertibleNotesPayableTwoMember 2012-11-02 2012-12-31 0001497647 trig:MinorityShareholdersOfGrilledCheeseMember 2012-10-19 2012-11-19 0001497647 us-gaap:WarrantMember 2012-10-08 2012-11-08 0001497647 us-gaap:WarrantMember 2012-09-18 2012-10-18 0001497647 trig:ExchangeAgreementMember us-gaap:CommonStockMember 2012-09-18 2012-10-18 0001497647 trig:ConvertibleNotesPayableTwoMember 2012-09-18 2012-10-18 0001497647 trig:GctMember trig:MinorityShareholdersOfGrilledCheeseMember 2012-09-18 2012-10-18 0001497647 trig:GctMember trig:MajorityShareholdersOfGrilledCheeseMember 2012-09-18 2012-10-18 0001497647 us-gaap:ConvertibleNotesPayableMember 2012-09-18 2012-10-18 0001497647 us-gaap:WarrantMember 2012-08-01 2012-09-01 0001497647 us-gaap:WarrantMember 2012-06-16 2012-07-16 0001497647 us-gaap:WarrantMember 2012-01-01 2012-12-31 0001497647 us-gaap:WarrantMember trig:ScenarioPostReverseMergerMember 2012-01-01 2012-12-31 0001497647 us-gaap:WarrantMember trig:ScenarioPreReverseMergerMember 2012-01-01 2012-12-31 0001497647 us-gaap:WarrantMember 2012-01-01 2012-12-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SuppliersTwoAndThreeMember 2012-01-01 2012-12-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierTwoMember 2012-01-01 2012-12-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierOneMember 2012-01-01 2012-12-31 0001497647 us-gaap:AdditionalPaidInCapitalMember 2012-01-01 2012-12-31 0001497647 trig:WarrantIssuanceThreeMember 2012-01-01 2012-12-31 0001497647 us-gaap:RetainedEarningsMember 2012-01-01 2012-12-31 0001497647 us-gaap:PreferredStockMember 2012-01-01 2012-12-31 0001497647 trig:WarrantIssuanceOneMember 2012-01-01 2012-12-31 0001497647 trig:WarrantIssuanceTwoMember 2012-01-01 2012-12-31 0001497647 trig:ConvertibleNotesPayableTwoMember 2012-01-01 2012-12-31 0001497647 us-gaap:EmployeeStockOptionMember 2012-01-01 2012-12-31 0001497647 us-gaap:ConvertibleNotesPayableMember 2012-01-01 2012-12-31 0001497647 us-gaap:CommonStockMember 2012-01-01 2012-12-31 0001497647 2012-01-01 2012-12-31 0001497647 us-gaap:SubsequentEventMember 2014-04-14 0001497647 trig:PbnjAdvisorsMember us-gaap:SubsequentEventMember 2014-04-11 0001497647 us-gaap:VehiclesMember 2014-03-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierOneMember 2014-03-31 0001497647 us-gaap:SeriesAPreferredStockMember 2014-03-31 0001497647 trig:TruckEquipmentMember 2014-03-31 0001497647 trig:ShareBasedCompensationEquityPlanMember 2014-03-31 0001497647 trig:TransactionTwoMember 2014-03-31 0001497647 trig:TransactionOneMember 2014-03-31 0001497647 us-gaap:NonsoftwareLicenseArrangementMember 2014-03-31 0001497647 us-gaap:LeaseholdImprovementsMember 2014-03-31 0001497647 trig:BlankCheckPreferredStockMember 2014-03-31 0001497647 trig:ConvertibleNotesPayableTwoMember 2014-03-31 0001497647 trig:RelatedPartySecuredPromissoryNotePayableMember 2014-03-31 0001497647 trig:FoodServiceEquipmentMember 2014-03-31 0001497647 trig:PosSystemsMember 2014-03-31 0001497647 trig:ClarkGroupAgreementMember 2014-03-31 0001497647 trig:CohenAdvisoryAgreementMember 2014-03-31 0001497647 trig:VillardAdvisoryAgreementMember 2014-03-31 0001497647 trig:GrandviewAdvisoryAgreementMember 2014-03-31 0001497647 trig:TrilogyIrAgreementMember 2014-03-31 0001497647 trig:TrigCapitalAdvisoryAgreementMember 2014-03-31 0001497647 trig:SecuredPromissoryNotePayableOneMember 2014-03-31 0001497647 us-gaap:FurnitureAndFixturesMember 2014-03-31 0001497647 us-gaap:ComputerEquipmentMember 2014-03-31 0001497647 2014-03-31 0001497647 us-gaap:NotesPayableOtherPayablesMember us-gaap:SubsequentEventMember 2014-02-28 0001497647 us-gaap:ConvertibleNotesPayableMember us-gaap:SubsequentEventMember 2014-02-28 0001497647 us-gaap:VehiclesMember us-gaap:SubsequentEventMember 2014-01-31 0001497647 trig:ChordAdvisorsAgreementMember us-gaap:ConvertibleNotesPayableMember us-gaap:SubsequentEventMember 2014-01-23 0001497647 us-gaap:ConvertibleNotesPayableMember us-gaap:SubsequentEventMember 2014-01-23 0001497647 us-gaap:WarrantMember 2013-12-31 0001497647 us-gaap:VehiclesMember 2013-12-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierOneMember 2013-12-31 0001497647 us-gaap:SeriesAPreferredStockMember 2013-12-31 0001497647 us-gaap:AdditionalPaidInCapitalMember 2013-12-31 0001497647 trig:PromissoryNoteMember us-gaap:CommonStockMember 2013-12-31 0001497647 trig:UnsecuredPromissoryNotePayableMember 2013-12-31 0001497647 trig:TruckEquipmentMember 2013-12-31 0001497647 us-gaap:RetainedEarningsMember 2013-12-31 0001497647 us-gaap:PreferredStockMember 2013-12-31 0001497647 trig:ShareBasedCompensationEquityPlanMember 2013-12-31 0001497647 trig:AssetPurchaseAgreementTwoMember 2013-12-31 0001497647 trig:AssetPurchaseAgreementMember 2013-12-31 0001497647 trig:ExercisePriceRangeOneMember 2013-12-31 0001497647 trig:AmendedClarkGroupAgreementMember 2013-12-31 0001497647 trig:PeterGoldsteinMember 2013-12-31 0001497647 trig:AmendedLeeAgreementMember 2013-12-31 0001497647 us-gaap:NotesPayableOtherPayablesMember 2013-12-31 0001497647 us-gaap:NotesPayableOtherPayablesMember us-gaap:CommonStockMember 2013-12-31 0001497647 us-gaap:NonsoftwareLicenseArrangementMember 2013-12-31 0001497647 us-gaap:LeaseholdImprovementsMember 2013-12-31 0001497647 trig:BlankCheckPreferredStockMember 2013-12-31 0001497647 trig:ConvertibleNotesPayableTwoMember 2013-12-31 0001497647 trig:RelatedPartySecuredPromissoryNotePayableMember 2013-12-31 0001497647 trig:FoodServiceEquipmentMember 2013-12-31 0001497647 trig:PosSystemsMember 2013-12-31 0001497647 trig:ClarkGroupAgreementMember 2013-12-31 0001497647 trig:TrilogyCapitalStockPurchaseAgreementMember us-gaap:PresidentMember 2013-12-31 0001497647 trig:TrilogyCapitalStockPurchaseAgreementMember trig:RobertLeeMember 2013-12-31 0001497647 trig:CohenAdvisoryAgreementMember 2013-12-31 0001497647 trig:ChordAdvisorsAgreementMember us-gaap:NotesPayableOtherPayablesMember 2013-12-31 0001497647 trig:ChordAdvisorsAgreementMember 2013-12-31 0001497647 trig:VillardAdvisoryAgreementMember 2013-12-31 0001497647 trig:GrandviewAdvisoryAgreementMember 2013-12-31 0001497647 trig:TrilogyIrAgreementMember 2013-12-31 0001497647 trig:TrigCapitalAdvisoryAgreementMember 2013-12-31 0001497647 trig:SecuredPromissoryNotePayableOneMember 2013-12-31 0001497647 us-gaap:FurnitureAndFixturesMember 2013-12-31 0001497647 us-gaap:ConvertibleNotesPayableMember 2013-12-31 0001497647 us-gaap:ConvertibleDebtMember 2013-12-31 0001497647 us-gaap:ComputerEquipmentMember 2013-12-31 0001497647 us-gaap:CommonStockMember 2013-12-31 0001497647 2013-12-31 0001497647 us-gaap:ConvertibleDebtMember 2013-10-31 0001497647 us-gaap:WarrantMember 2013-10-08 0001497647 trig:UnitsMember 2013-10-08 0001497647 trig:ShareBasedCompensationEquityPlanMember 2013-09-30 0001497647 trig:ConsultantMember us-gaap:CommonStockMember 2013-09-30 0001497647 us-gaap:CommonStockMember 2013-09-30 0001497647 us-gaap:WarrantMember 2013-09-06 0001497647 trig:AssetPurchaseAgreementMember us-gaap:CommonStockMember 2013-08-31 0001497647 trig:AssetPurchaseAgreementMember us-gaap:WarrantMember 2013-08-08 0001497647 trig:AssetPurchaseAgreementMember 2013-08-08 0001497647 us-gaap:WarrantMember 2013-06-25 0001497647 us-gaap:WarrantMember 2013-06-21 0001497647 us-gaap:PrivatePlacementMember us-gaap:CommonStockMember 2013-06-21 0001497647 trig:ConvertibleNotesPayableTwoMember 2013-06-21 0001497647 us-gaap:ConvertibleNotesPayableMember 2013-05-31 0001497647 trig:ConsultantMember us-gaap:CommonStockMember 2013-04-30 0001497647 us-gaap:PrivatePlacementMember us-gaap:CommonStockMember 2013-04-18 0001497647 trig:TransactionTwoMember us-gaap:WarrantMember 2013-04-18 0001497647 trig:TransactionOneMember us-gaap:WarrantMember 2013-04-18 0001497647 trig:ConvertibleNotesPayableTwoMember 2013-04-18 0001497647 us-gaap:WarrantMember 2013-04-17 0001497647 us-gaap:WarrantMember 2013-04-04 0001497647 trig:ConvertibleNotesPayableTwoMember 2013-03-31 0001497647 us-gaap:ConvertibleNotesPayableMember 2013-03-31 0001497647 2013-03-31 0001497647 us-gaap:WarrantMember 2013-03-28 0001497647 us-gaap:WarrantMember 2013-03-22 0001497647 us-gaap:WarrantMember 2013-03-04 0001497647 us-gaap:WarrantMember 2013-02-15 0001497647 us-gaap:WarrantMember 2013-01-28 0001497647 us-gaap:WarrantMember 2013-01-15 0001497647 us-gaap:WarrantMember 2013-01-10 0001497647 us-gaap:WarrantMember 2012-12-31 0001497647 us-gaap:VehiclesMember 2012-12-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierTwoMember 2012-12-31 0001497647 us-gaap:SupplierConcentrationRiskMember us-gaap:CostOfGoodsTotalMember trig:SupplierOneMember 2012-12-31 0001497647 us-gaap:AdditionalPaidInCapitalMember 2012-12-31 0001497647 trig:TruckEquipmentMember 2012-12-31 0001497647 us-gaap:RetainedEarningsMember 2012-12-31 0001497647 us-gaap:PreferredStockMember 2012-12-31 0001497647 us-gaap:LeaseholdImprovementsMember 2012-12-31 0001497647 us-gaap:InternetDomainNamesMember 2012-12-31 0001497647 trig:ConvertibleNotesPayableTwoMember 2012-12-31 0001497647 trig:FoodServiceEquipmentMember 2012-12-31 0001497647 trig:PosSystemsMember 2012-12-31 0001497647 us-gaap:FurnitureAndFixturesMember 2012-12-31 0001497647 us-gaap:ConvertibleNotesPayableMember 2012-12-31 0001497647 us-gaap:ComputerEquipmentMember 2012-12-31 0001497647 us-gaap:CommonStockMember 2012-12-31 0001497647 2012-12-31 0001497647 us-gaap:WarrantMember 2012-12-19 0001497647 us-gaap:WarrantMember 2012-11-08 0001497647 us-gaap:WarrantMember 2012-10-18 0001497647 trig:ExchangeAgreementMember us-gaap:CommonStockMember 2012-10-18 0001497647 trig:ConvertibleNotesPayableTwoMember 2012-10-18 0001497647 us-gaap:WarrantMember 2012-09-01 0001497647 us-gaap:WarrantMember 2012-07-16 0001497647 us-gaap:WarrantMember 2011-12-31 0001497647 us-gaap:AdditionalPaidInCapitalMember 2011-12-31 0001497647 us-gaap:RetainedEarningsMember 2011-12-31 0001497647 us-gaap:PreferredStockMember 2011-12-31 0001497647 us-gaap:CommonStockMember 2011-12-31 0001497647 2011-12-31 The Company used fair value of the Company's common stock as the market price to value stock options which were granted. The fair value was determined based on valuation performed by Management, which took into consideration, where applicable, cash received , market participant inputs, estimated cash flows based on entity specific criteria, purchase multiples paid in other comparable third-party transactions, market conditions, liquidity, operating results and other qualitative and quantitative factors. The fair value of the Company's common stock on each grant date are adjusted to estimated fair value and the volatility in general economic conditions, stock markets, earnings or revenue multiples of comparable companies and other qualitative and quantitative factors may result in significant changes in the estimated fair value of the Company's common stock from period to period.