NOTE 14 - SUBSEQUENT EVENTS

For the period from February 1, 2015 through March 15, 2015, The Company issued 3,000,000 shares of Common Stock in transactions that were not registered under the Securities Act of 1933. The shares of Common Stock were issued upon the conversion of 3,000 shares of Series F-1 Preferred Stock in reliance upon the exemption from registration in Section 3(a)(9) of the Securities Act of 1933. As of March 15, 2015 the Company has 17,513,164 shares of Common Stock outstanding.

On February 20, 2015, the Company entered into the Settlement with Zurich which provided for the payment to Zurich by the Company of $650,000 to settle the Company’s outstanding balance of approximately $1,534,000 that had been in default, and was previously due in full on December 31, 2013 under an existing forbearance agreement with Zurich. Upon execution of the Settlement, the Company paid Zurich $200,000, with the remaining balance of $450,000 payable in 10 equal monthly installments of $45,000. As part of the Settlement, Zurich remains entitled to receive a customer payment in the amount of approximately $324,000, which the company has not recognized in its financial statements, related to the Company’s previous project at the Cooper Medical Center of Rowan University in Camden, New Jersey (the “Cooper Project”) for the CCIA, but only if such amount is collected by the Company. Moreover, conditioned upon receipt of the full settlement amount, Zurich has agreed to release all of its entire right, title and interest in and to the Cooper Project, against which the Company recently filed an action to recover approximately $2,400,000 from the CCIA.

On February 3, 2015, the Company and its interim Chief Executive Officer entered into an amendment (the “Amendment”) to the letter agreement between the Company and the interim Chief Executive officer effective as of August 1, 2013, setting forth the terms of employment by the Company of the interim Chief Executive Officer (the “Agreement”). Under the terms of the Amendment, the interim Chief Executive Officer will receive an annual base salary of $180,000, effective as of January 1, 2015, and options to purchase 300,000 shares of the Company’s common stock, subject to performance-based vesting.