Explanation of Responses:
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1)
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Currently exercisable
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2)
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Reporting person is the Sole owner of Davis & Associates Inc. and has sole voting power.
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3)
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The warrants were purchased as part of as a Unit at a price of $1.00 per unit. Each unit consisted of one share of $0.00001 par value common stock and one redeemable five-year warrant to purchase one share of common stock at $1.30 per share. The warrants became exercisable and separately transferable from the shares of common stock on February 6, 2009.
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4)
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Options vest as to 433 shares per month for 23 months beginning April 1, 2010 and as to 415 shares on March 1, 2012.
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5)
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On June 11, 2010, the Company executed a promissory note in the principal amount of $130,000 with a maturity date of December 1, 2010, with interest to accrue daily and payable in Warrants through July 10, 2010. (the "Note"). Warrants accrued at a rate of 333.333 shares of common stock per day up to a maximum warrant coverage of 10,000 shares of common stock per $13,000 original principal amount of Notes, which equals a maximum warrant of 100,000 shares of common stock with respect to the Note. On July 12, 2010, warrants representing the 100,000 shares of accrued warrant interest were issued to the reporting person.
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6)
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On June 11, 2010, the Company executed a promissory note in the principal amount of $26,000 with a maturity date of December 1, 2010, with interest to accrue daily and payable in Warrants through July 10, 2010. (the "Note"). Warrants accrued at a rate of 333.333 shares of common stock per day up to a maximum warrant coverage of 10,000 shares of common stock per $13,000 original principal amount of Notes, which equals a maximum warrant of 20,000 shares of common stock with respect to the Note. On July 12, 2010, warrants representing the 20,000 shares of accrued warrant interest were issued to the reporting person.
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7)
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On June 28, 2010, the issuer entered into a loan guarantee agreement pursuant to which the reporting person will be issued up to 95,555 shares of issuer's common stock as compensation for guaranteeing $1,000,000 of issuer's bank debt through November 30, 2011 and $900,000 of bank debt from December 1, 2010 through March 28, 2011. Reporting person will receive 11,111 shares per month for five months, and 10,000 shares a month for four months. A minimum amount six months'compensation will be paid to the reporting person.
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8)
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Pursuant to a loan guarantee agreement dated March 19, 2009, the issuer issued 11,111 shares of common stock to the reporting person for his $1,000,000 guarantee of the issuer's bank debt for the month of March, 2010. The price was determined based on the last sale price in the date of the agreement.
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9)
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Pursuant to a loan guarantee agreement dated March 28, 2010, the issuer issued 11,111 shares of common stock to the reporting person for his $1,000,000 guarantee of the issuer's bank debt for the month of April, 2010. The price was determined based on the average of the close bid and asked price of the common stock on the date of the agreement.
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10)
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Pursuant to a loan guarantee agreement dated April 28, 2010, the issuer issued 22,222 shares of common stock to the reporting person for his $1,000,000 guarantee of the issuer's bank debt for May and June, 2010. The price was determined based on the average of the close bid and asked price of the common stock on the date of the agreement.
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11)
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Pursuant to a loan guarantee agreement dated June 28, 2010, the issuer issued 65,555 shares of common stock to the reporting person for his $1,000,000 guarantee of the issuer's bank debt through December 31, 2010. The price was determined based on the average of the close bid and asked price of the common stock on the date of the agreement.
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12)
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Pursuant to a loan agreement dated September 21, the issuer issued 31,302 shares of common stock to the reporting person for his $243,000 loan to the issuer through July, 2010. The price was determined based on the average of the close bid and asked price of the common stock on the date of the agreement.
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