10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D. C. 20549

FORM 10-K

[  ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 2013

[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from January 31, 2013 to December 31, 2013

Commission file number 000-52524

Thinspace Technology, Inc.

(Exact name of registrant as specified in its charter)

Delaware	43-2114545
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer  Identification No.)

5535 S. Williamson Blvd, Unit 751

Port Orange, FL 32128

(Address of principal executive offices)

 (786) 763-3830

(Issuer's telephone number)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001

Indicate by check mark whether the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.  o Yes   þ    No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   o Yes þ   No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  þ Yes   o        No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 

 þ     Yes        ¨   No 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K .   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act)  Yes  þ     No  

As of June 30, 2013, the aggregate market value of the issued and outstanding common stock held by non-affiliates of the registrant, based upon the last sales price of the registrant’s common stock of $0.44 was approximately $888,666. For purposes of the above statement only, all directors, executive officers and 10% shareholders are assumed to be affiliates.  This determination of affiliate status is not necessarily a conclusive determination for any other purpose.

Number of shares of common stock outstanding as of March 18, 2014 was 91,621,564.

DOCUMENTS INCORPORATED BY REFERENCE – None

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FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013

INDEX

		Page
	PART I
Item 1	Business	3
Item 1A	Risk Factors	8
Item 1B	Unresolved Staff Comments	13
Item 2	Properties	13
Item 3	Legal Proceedings	13
Item 4	Mine Safety Disclosures	13
	PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6	Selected Financial Data	14
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	17
Item 8	Financial Statements and Supplementary Data	F-1
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	18
Item 9A	Controls and Procedures	18
Item 9B	Other Information	18
	PART III	19
Item 10	Directors, Executive Officers, and Corporate Governance	21
Item 11	Executive Compensation	22
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	22
Item 13	Certain Relationships and Related Transactions, and Director Independence	22
Item 14	Principal Accountant Fees and Services	22
	PART IV
Item 15	Exhibits and Financial Statement Schedules	24
	Signatures	25

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PART I

ITEM 1. BUSINESS

Corporate History

Thinspace Technology, Inc. was incorporated in the State of Delaware on November 22, 2006 under the name Map V Acquisition, Inc. 

On April 2, 2008, the Company entered into a Share Exchange Agreement with Vanity Holding Group, Inc. (“Vanity Group”) and Vanity Group’s then shareholders whereby we acquired all of the issued and outstanding shares of the common stock of Vanity Group. Upon consummation of the acquisition, Vanity Group became a wholly-owned subsidiary of the Company. Subsequent to the completion of the reverse merger acquisition, the Company filed a Certificate of Amendment with the Delaware Secretary of State changing its name from “Map V Acquisition, Inc.” to “Vanity Events Holding, Inc.” in 2008.

On December 31, 2010, the Company entered into a share exchange agreement (“Exchange Agreement”) by and among the Company, Shogun Energy, Inc., a South Dakota corporation (“Shogun”), Shawn Knapp, the principal shareholder of Shogun (the “Principal Shareholder”) and the other shareholders of Shogun (the “Shogun Shareholders” and collectively with the Principal Shareholder, the “Shareholders”).   The closing of the transaction took place on December 31, 2010.  Upon the closing of the Exchange, the Company shifted its operations to focus on the business of Shogun.

On June 30, 2011 the Company, Shogun, Mr. Knapp, Roxanne Knapp and the Shareholders entered into a rescission agreement pursuant to which, upon closing, the Exchange Agreement was rescinded, any and all obligations of any party arising from such Exchange Agreement, were, in all respects, deemed to be null and void and of no further force and effect.

Beginning in 2012, management decided to evolve its business strategy from a licensing and marketing company to an e-commerce transactional business.

Pursuant to an Agreement of Merger and Reorganization dated December 31, 2013 (the “Merger Agreement”) between the Company, VAEV Merger Sub, Inc., and  Thinspace Technology Ltd. (formerly known as Propalms Ltd.) (“Thinspace UK”), VAEV Merger Sub merged with Thinspace UK and all of the issued and outstanding shares of Thinspace UK were exchanged for 80,200,000 shares of common stock of the Company, representing approximately 91.6% of the outstanding shares of common stock the Company, resulting in a change in control of the Company.

Thinspace UK is a cloud computing company that  develops software productivity products that allow its customers secure access to centrally managed Desktops or Software Applications  and to work and collaborate from anywhere, accessing enterprise apps and data on any of the latest devices, as easily as they would in their own office- simply and securely.

Effective December 31, 2013, the Company’s existing officer and two of its three directors resigned, and two new directors and officers who were nominees of Propalms were appointed as directors and officers of the Company.

As a result of the foregoing, we have determined to treat the acquisition as a reverse recapitalization for accounting purposes, with Thinspace UK as the acquirer for accounting purposes. As such, the financial information, including the operating and financial results, included in this current report on Form 10-K are that of Thinspace UK rather than that of the Company prior to the closing of the Merger Agreement.

On February 6, 2014, the Company changed its name to Thinspace Technology, Inc.

On February 27, 2014, Propalms International, Ltd., a Nevada corporation an indirect wholly owned subsidiary of the Company, changed its name to Thinspace Technology, Ltd. (“Thinspace Nevada”).

On March 10, 2014, the Company’s wholly-owned subsidiary, Propalms Ltd., a UK registered company changed its name to Thinspace Technology Ltd.

References in this report to “Thinspace”, “Thinspace Technology”, “we,” “us,” “our” and similar words refer to the Company and its wholly-owned subsidiaries, Thinspace UK and Thinspace Nevada, unless the context indicates otherwise, and, prior to the closing, these terms refer to Thinspace UK and Thinspace Nevada. References to Vanity relate to the Company prior to the closing of the Merger Agreement.

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Overview

Thinspace Technology  is a cloud computing company that  develops software productivity solutions that allow its customers secure access to centrally managed Desktops or Software Applications  and to work and collaborate from anywhere, accessing enterprise apps and data on any of the latest devices, as easily as they would in their own office- simply and securely. 

Our cloud computing solutions help IT and service providers build both private and public clouds, leveraging virtualization and networking technologies to deliver high-performance, elastic and cost-effective services for mobile workstyles.

Thinspace products have been designed to suit the needs of all sizes of organizations from 5 to 50,000+ users. Customers have found Propalms products to be easier to use, faster to implement and cheaper to maintain than other similar software, which is important to small and medium sized companies or governmental offices as well as large enterprise organizations that are looking to reduce their IT infrastructure costs. We market and license our products directly to systems integrators, or SIs, in addition to indirectly through value-added resellers, or VARs, value-added distributors, or VADs, and original equipment manufacturers, or OEMs.

Thinspace Technology Ltd. (formerly known as Propalms Ltd.) is a United Kingdom corporation founded on October 11,  2001 and launched sales in July 2005.

Thinspace Technology Ltd. (formerly known as Propalms International Ltd) is a Nevada corporation founded on August 24,  2010 and is a wholly-owned subsidiary of Thinspace UK.

Our Products

We have developed software products that all allow our customers secure access to centrally managed Desktops or Software Applications:

Propalms TSE – allows customers to deliver single software applications to any kind of device either inside or outside the corporate network.

Propalms One Gate- allows secure encrypted access to data or applications from outside the corporate network.

Propalms VDI – allows a Microsoft Windows desktop to be centrally run, managed and delivered to any kind of device.

Propalms – Pano Logic G2 – The G2 is a Zero Client that replaces traditional desktops, allows secure fast access to hosted virtual desktops

Thin Space – is a branded hardware Zero Client Solution aimed for the enterprise and corporate markets.

These products have been designed to suit the needs of all sizes of organizations from 5 to 50,000+ users. Our products are functionally comparable to similar products developed and sold by the market leader Citrix Systems Inc.

Customers have found our  products to be easier to use, faster to implement and cheaper to maintain than other similar software, which is important to small and medium sized companies or governmental offices as well as large enterprise organizations that are looking to reduce their IT infrastructure costs.

We sell our products directly to independent software vendors, or ISVs, and application service providers or ASPs and through our worldwide network of distributors and resellers to end users.

End users are from both the public and private sectors and typically have between 5 and 1000 desktop computers in their organization.  Examples of current users by industry are:

·Manufacturing	Toyota Group (Japan)
·Software Houses	McCracken Financial Software (USA)
·Local Government	Town of Whitby (Canada)
·Distribution	Hisco (USA)
·Health Care	Community Health of Southern Iowa (USA)
·Educational Establishments	University of Suffolk (USA)
·Legal	Lavery De Billy Avocats (Canada)
·Charitable organisations	Alzheimer’s Association (USA)
·Banking	Capitol Bank (USA)
·Financial	Redstone Federal Credit Union (USA)
● Facilities Management	Cofely (UK)

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MARKET SIZE & TRENDS

The potential market for Microsoft server based computing (SBC) software, also known as thin client software solutions, is estimated to be $4.5 billion in 2014. This estimate is based on our knowledge of the market and interpretation of Microsoft’s and Citrix accounts.

Our product set has comparable functionality to Citrix as well as greater speed and simpler installation processes. However, our low cost base enables us to offer ours products at a much lower competitive price than Citrix, currently approximately 50% less per user. Our maintenance cost for any potential customer is also substantially lower.

Through our network of distributors and resellers, we are typically targeting medium size organizations with up to 1000 users. Citrix mainly target organizations with a larger number of users and consequently they are not currently a significant competitor to us.

Executive Summary

The potential market for Microsoft server based computing (SBC) software, also known as thin client software solutions, is estimated to be approximately $4.5 billion in 2014. This estimate is based on our knowledge of the market and interpretation of Microsoft’s and Citrix accounts.

Thinspace Technology has developed three software products that all allow our customers secure access to centrally managed Desktops or Software Applications:

 Propalms TSE – allows you deliver single software applications to any kind of device either inside or outside the corporate network.

 Propalms One Gate- allows secure encrypted access to data or applications from outside the     corporate network.

 Propalms VDI – allows a Microsoft Windows desktop to be centrally run, managed and delivered to any kind of device.

Our 2013 acquisitions have added two new products to our suite of solutions:

 Pano Logic G2 – The G2 is a Zero Client that replaces traditional desktops, allows secure fast access to hosted virtual desktops

 Thin Space – A branded hardware zero thin client solution aimed for the enterprise and corporate market.

Marketing

Our marketing plan focuses on key sales and marketing initiatives, many of these are internet based marketing strategies, which have proven results.  Our objective when undertaking these marketing activities is to generate as many “web downloads” and undertake as many “on line live demos” as possible, as these tend to secure more sales conversions than any other kind of lead.

We plan to combine our websites into one site, www.thinspace.com, which will be re-designed and optimized for search engines. We anticipate that this will take place before the close of the 4th quarter of 2014.

Our products are all freely downloadable as a fully functional 30 day evaluation.  We have produced slow growth in the number of people visiting due to the lack of sustained marketing activity. Our current websites are www.thinspaceinc.com, www.propalms.com and www.vanityeventsholdinginc.com.

Our chosen website marketing strategies are:

· Website optimisation; inserting key words and phrases within our website, which when a prospect searches via various search engines, ensures that Propalms /Thinspace website is always presented to them.

· Google Ad words; Pay-per-click advertising is becoming increasingly more available with web companies like Google and Overture and is very effective in driving people to the desired website.  The most important issue with pay-per-click is to target the correct search phrase, include brand names and the like, but most importantly; they lead the browser through to a relevant web page and doesn’t generate “bounce”.

· Partner Sponsorship; There is a number of “Server Based Computing Industry” websites that are a valuable source of information for clients involved or interested in this kind of technology.  These sites include www.brianmadden.com www.dabcc.com and www.MSTerminalservices.org.  We will seek to have a presence on these sites in order to raise our profile considerably amongst industry professionals.

· Interactive Chat; Under this method, if a browser is clicking around our site, we can engage in an online, real time “chat” with them to establish their interest and point them in the right direction to find what they are looking for on the site.

· Domain Name Registration; Register as many worldwide domain extensions as possible in order to show a “global” web presence.

· Website Language Localisation; Translate our website into as many languages as possible in order to show a “global” presence and courtesy to clients around the world.  To coincide with worldwide domain extension registrations.

· Website Design; Continual refresh and update of our website to ensure maximum return visits, retain customer/prospect interest and become a valuable source of information for both our customers and prospects.

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EMARKETING

E-marketing is the “media” of today, with direct hits to the right contacts, giving us traceable leads and a return on our investment that can be measured.

· Emedia/ITMedia/Redmond; Many IT professionals subscribe to various industry news and sales resources.  We have used a number of these resource/companies to promote our products, with proven results.  They work on a “cost per lead” basis, our campaigns would usually focus around getting the prospects to download our evaluation/trial software or take an on line web demo, which is then followed up by our telesales team.

· Email Blasts (E-shot); either working with our channel partners or using our own customer relationship management (or CRM) data, we can E-shot our prospects on a regular basis to promote products and communicate our message.

DIRECT MAIL

We intend to run direct mail campaigns in conjunction with telemarketing campaigns.  Direct mailers typically do not work without a follow up. We will target the following markets with direct mail campaigns:

· Resellers; to assist our distribution channel to grow our reseller base.

· End Users; to generate end user leads across all market sectors, which we can qualify and pass to our channel for appropriate follow up and close.

· ISV’s; this market is a relatively untapped market for us. Propalms TSE is a very attractive proposition for ISV’s to deliver their own applications, via server based computing, for relatively low initial outlay compared to that of our main competitors.

· ASP Hosting Companies; this market is a relatively untapped market for us.  Propalms TSE is a very attractive proposition for ASP Hosting companies to deliver their services, via server based computing, for relatively low initial outlay compared to that of our main competitors.

· Targeting “Original Equipment Manufacturers” to promote our product to be bundled with their software or systems.  This is usually done via a formal “OEM Contract”.

TELEMARKETING

We believe telemarketing is a fundamental sales function that is imperative to ensure we are making continual in roads into new prospects.  In order to be effective it is imperative that we are able to “buy in” quality contact data in order to target specific chosen sectors.  We plan to target the following sectors:

· ISV’s

· ASP Hosting Companies

· OEM

· End Users – target customers across all vertical sectors

We believe another effective use of telemarketing resource is to plant “funded heads” in the offices of our channel partners.  This funded head, would work for and be paid by us, promoting our products and services to the channel partners customer base.  The funded head would prove an invaluable resource for the channel partner to use for the following:

· Onsite support to include telemarketing into resellers/distributors customer database

· Product sales training to resellers/distributors sales teams

· Managing supplier promotion/spiff days

· Liaising between reseller/distributors marketing team and Thinspace

In return we would expect a commitment from the channel partner, and for them to supply:

· Desk, telephone and internet access

· Access to reseller/distributors account managers

· Access to customer database, to enable telesales activity

· Free inserts into reseller/distributors price lists, catalogues

· Free inserts in eshots and mail shots

· Space on stands at trade shows and exhibitions

· Website presence for Thinspace on reseller/distributors website

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SHOWS & EVENTS

In order for us to gain respect and have our profile raised within our market sectors it is important for us to be present at top industry shows as well as events co-hosted by our channel partners and technology partners.  It is our aim to be involved in as many of these as possible. These events include the following:

· Microsoft; Our main industry technology partner hosts a number of events throughout the world on an on-going basis

· Infor; One of the world’s fastest growing ISV’s host annual conferences in US

· VMWorld; The worlds’ largest trade show focussing on the virtualisation market space.

· InfoSec; Infosecurity is a series of events across the globe, and the most comprehensive convergence of information security professionals.  It addresses today’s strategic and technical issues in an unrivalled education programme and showcases the most diverse range of new and innovative products and services.

· Partner Events; Our channel partners hold regular and ad hoc events promoting their products and services.  We intend to attend and be part of as many of these events as possible, in many cases these events would have a “Thinspace Only” focus and would target both other channel partners/resellers and end users

PROMOTIONAL ITEMS & BROCHUREWARE

It is important for us to be able to provide our prospects with various promotional media, particularly at events and following up from other marketing activities.  These items include:

· Product brochures and price lists

· Promotional items, such as pens, polo shirts, stress balls and other giveaways with our web address and logo on, used to keep the “Thinspace” name in front of our prospects.

Intellectual Property

The Company owns copyright on all its current range of products as well as ownership of domain names. The Company is considering the possibility of applying for patents on some on some of its software application development as well as future hardware design.

Competition

The market for SBC was started by and is dominated by Citrix who developed the first SBC product.  Citrix have continued to develop the product and the market from the late 1990s and have maintained their position as the major worldwide supplier.

There are now a small number of other providers who have followed Citrix into the SBC market but they do not appear to have gained any significant share. The key ones are referred to below.

· Jetro Technologies Limited is a privately owned company based in Israel.  They have a number of distributors but to date none of Propalms distributors have reported any activity amongst their customers and prospective customers.

· Ericom Software Limited is a publicly owned company based in Israel.  They have recently developed a SBC software solution and as of now have not made any significant sales.

· Hopto Inc, (HPTO.OB) based in California is a publicly traded company. They used to focus on selling their solution in the Unix market, to a very select group of customers. They have now changed direction in developing applications for mobile devices

· Provision Networks Inc, based in U.S.A. They have recently been purchased by QUEST Software (QSFT) for an undisclosed amount.

· Microsoft’s 2003, 2008 & 2012 Terminal Services Edition offers a thin client solution that can be sold in its own right and is most suitable for organizations with 5 to10 users running a single server.

Customers

During the eleven months ended December 31, 2013 one distributor, Air Company, Japan, accounted for approximately 10% of our net revenues.

Research and Development

During the eleven months ended December 31, 2013, we spent an estimated $400,000 on research and development costs. Our research and development takes place in Puna, India.

Employees

As of March 18, 2014 the Company employs a total of 11full-time employees.

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ITEM 1A.  RISK FACTORS

An investment in the Company’s common stock involves a high degree of risk. In determining whether to purchase the Company’s common stock, an investor should carefully consider all of the material risks described below, together with the other information contained in this report before making a decision to purchase the Company’s securities. An investor should only purchase the Company’s securities if he or she can afford to suffer the loss of his or her entire investment.

Risks Related to Our Business

Because we have a limited operating history, our ability to fully and successfully develop our business is unknown.

Our ability to successfully develop our products, and to realize consistent, meaningful revenues and profit has not been established and cannot be assured. For us to achieve success, our products must receive broad market acceptance by consumers. Without this market acceptance, we will not be able to generate sufficient revenue to continue our business operation. If our products are not widely accepted by the market, our business may fail. Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to generate revenues, manage development costs and expenses, and compete successfully with our direct and indirect competitors.

Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the development, production, marketing, and sales of our product. As a result, we may not generate significant revenues in the future. Failure to generate significant revenues in near future may cause us to suspend or cease activities.

We will need additional funds to produce, market, and distribute our product.

We will have to spend additional funds to produce, market and distribute our product. If we cannot raise sufficient capital, we may have to cease operations and you could lose your investment. We will need additional funds to produce our product for distribution to our target market. Even after we complete the production of our product, we will have to spend substantial funds on distribution, marketing and sales efforts before we will know if we have commercially viable and marketable/sellable products.

There is no guarantee that we will achieve sufficient sale levels.

There is no guarantee that the expenditure of money on distribution and marketing efforts will translate into sales or sufficient sales to cover our expenses and result in profits.

Our development, marketing, and sales activities are limited by our size.

Because we are small and do not have much capital, we must limit our product development, marketing, and sales activities. As such we may not be able to complete our production and business development program and this will have a material adverse effect on the Company’s business, financial condition and results of operations.

Intense competition and increasing competition in the THIN CLIENT market could hurt our business.

The market for thin clients is highly competitive. Market participants are of various sizes, with various market shares and geographical reach, some of whom have access to substantially more sources of capital. We will compete generally with major companies such as Citrix, Hopto, Ericom and 2X. As a result of both direct and indirect competition, our ability to successfully distribute, market and sell our product, and to gain sufficient market share in the United States to realize profits may be limited, and our business plan may not succeed.

Unfavorable general economic conditions in the United States could negatively impact our financial performance.

Unfavorable general economic conditions, such as a recession or economic slowdown, in the United States could negatively affect the affordability of, and demand for, our product in the United States. Lower demand for our product in the United States could reduce our profitability.

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Changes in, or failure to comply with, the laws and regulations applicable to our products or our business operations could increase our costs or reduce our net operating revenues.

In addition, failure to comply with environmental, health or safety requirements and other applicable laws or regulations could result in the assessment of damages, the imposition of penalties, suspension of production, changes to equipment or processes, or a cessation of operations at our or our bottling partners’ facilities, as well as damage to our image and reputation, all of which could harm our profitability.

Our business could be adversely impacted by conditions affecting the information technology market.

The demand for our products and services depends substantially upon the general demand for business-related computer appliances and software, which fluctuates based on numerous factors, including capital spending levels, the spending levels and growth of our current and prospective customers, and general economic conditions. Moreover, the purchase of our products and services is often discretionary and may involve a significant commitment of capital and other resources. Future economic projections for the information technology sector are uncertain and highlight an industry in transition from legacy platforms to mobile, cloud, big data and social solutions. If our current and prospective customers cut costs they may significantly reduce their information technology expenditures. Additionally, if our current and prospective customers shift their information technology spending more rapidly towards newer technologies and solutions, the demand for our products and services most aligned with legacy platforms (such as our Desktop Virtualization products) could decrease. Fluctuations in the demand for our products and services could have a material adverse effect on our business, results of operations and financial condition.

If we do not develop new products and services, integrate acquired products and services and enhance our existing products and services, our business, results of operations and financial condition could be adversely affected.

The markets for our products and services are characterized by:

· rapid technological change;

· evolving industry standards;

· fluctuations in customer demand;

· changing and increasingly sophisticated customer needs; and

· frequent new product and service introductions and enhancements.

Our future success depends on our ability to continually enhance our current products and services, integrate acquired products and services, and develop and introduce new products and services that our customers choose to buy. The emerging markets for our next generation of products and services have yet to be defined. The introduction of third-party solutions embodying new technologies and the emergence of new industry standards could make our existing and future software solutions obsolete and unmarketable. If we are unable to keep pace with technological developments of third parties, expectations of the emerging markets and customer demands by introducing new products and services and enhancements, our business, results of operations and financial condition could be adversely affected. Our future success could be hindered by:

· delays in our introduction of new products and services;

· delays in market acceptance of new products and services or new releases of our current products and services;

· our failure to support services in a timely manner;

· our failure to identify and address significant product quality issues;

· our inability to position our and/or price our products and services to meet the market demand;

· our failure to maintain relevance in the evolving marketplace; and

· third party’s introduction of new products, or services or technologies that could replace, make obsolete or shorten the life cycle of our existing product and service offerings.

We believe the demand for technology has and will continue to shift from the types of products and services we and our competitors have sold in the past to a new generation of products and services. We cannot guarantee that our products will achieve the broad market acceptance by our channel and strategic partners, customers and prospective customers necessary to generate significant revenue in the future. In addition, we cannot guarantee that we will be able to respond effectively to technological changes or new product announcements by others. If we experience material delays or sales shortfalls with respect to our new products and services or new releases of our current products and services, those delays or shortfalls could have a material adverse effect on our business, results of operations and financial condition.

In order to be successful, we must attract, engage, retain and integrate key employees, and failure to do so could have an adverse effect on our ability to manage our business.

Our success depends, in large part, on our ability to attract, engage, retain, and integrate qualified executives and other key employees throughout all areas of our business. Identifying, developing internally or hiring externally, training and retaining highly-skilled managerial, technical, sales and services, finance and marketing personnel are critical to our future, and competition for experienced employees can be intense. In order to attract and retain executives and other key employees in a competitive marketplace, we must provide a competitive compensation package, including cash- and equity-based compensation. Failure to successfully hire executives and key employees or the loss of any executives and key employees could have a significant impact on our operations. Further, changes in our management team may be disruptive to our business, and any failure to successfully integrate key new hires or promoted employees could adversely affect our business and results of operations. Competition for qualified personnel in our industry is intense because of the limited number of people available with the necessary technical skills and understanding of products in our industry. The loss of services of any key personnel, the inability to retain and attract qualified personnel in the future or delays in hiring may harm our business and results of operations.

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Our products could contain errors that could delay the release of new products or that may not be detected until after our products are shipped.

Despite significant testing by us and by current and potential customers, our products, especially new products or releases or acquired products, could contain errors. In some cases, these errors may not be discovered until after commercial shipments have been made. Errors in our products could delay the development or release of new products and could adversely affect market acceptance of our products. Additionally, our products depend on third-party products, which could contain defects and could reduce the performance of our products or render them useless. Because our products are often used in mission-critical applications, errors in our products or the products of third parties upon which our products rely could give rise to warranty or other claims by our customers, which may have a material adverse effect on our business, financial condition and results of operations.

We rely on indirect distribution channels and major distributors that we do not control.

We rely significantly on independent distributors and resellers to market and distribute our products and appliances. For instance, one distributor, Air Company, Japan , accounted for approximately 10% of our net revenues in 2013. We maintain and periodically revise our sales incentive programs for our independent distributors and resellers, and such program revisions may adversely impact our results of operations. Our competitors may in some cases be effective in providing incentives to current or potential distributors and resellers to favor their products or to prevent or reduce sales of our products. The loss of or reduction in sales to our distributors or resellers could materially reduce our revenues. Further, we could maintain individually significant accounts receivable balances with certain distributors. The financial condition of our distributors could deteriorate and distributors could significantly delay or default on their payment obligations. Any significant delays, defaults or terminations could have a material adverse effect on our business, results of operations and financial condition.

Our Thin Client business could suffer if there are any interruptions or delays in the supply of hardware or hardware components from our third-party sources.

We rely on a concentrated number of third-party suppliers, who provide hardware or hardware components for our Thin Client products, and contract manufacturers. If we are required to change suppliers, there could be a delay in the supply of our hardware or hardware components and our ability to meet the demands of our customers could be adversely affected, which could cause the loss of a significant amount of sales and existing or potential customers and delayed revenue recognition and adversely affect our results of operations. While we have not, to date, experienced any material difficulties or delays in the manufacture and assembly of our Thin Client products, our suppliers may encounter problems during manufacturing due to a variety of reasons, including failure to follow specific protocols and procedures, failure to comply with applicable regulations, or the need to implement costly or time-consuming protocols to comply with applicable regulations (including regulations related to conflict minerals), equipment malfunction, natural disasters and environmental factors, any of which could delay or impede their ability to meet our demand.

If operating margins and gross margins decline, our future operating results could be adversely affected.

Our operating margins in our new initiatives may be lower than those we have achieved in our more mature products and services markets, and our new initiatives may not generate sufficient revenue to recoup our investments in them. We may experience a decline in gross margin as the mix of our revenue may include more products with a hardware component and increased sales of our services, both of which have a higher cost than our software products. If we are not able to recoup our investment by normalizing our margins or reducing our costs through integration of new initiatives it could adversely affect our business, results of operations and financial condition.

Actual or perceived security vulnerabilities in our products and services or cyberattacks on our networks could have a material adverse impact on our business and results of operations.

Use of our products and services may involve the transmission and/or storage of data, including in certain instances customers' business and personally identifiable information. Thus, maintaining the security of products, computer networks and data storage resources is important as security breaches could result in product or service vulnerabilities and loss of and/or unauthorized access to confidential information. We devote significant resources to addressing security vulnerabilities in our products and services through our efforts to engineer more secure products and services, enhance security and reliability features in our products and services, deploy security updates to address security vulnerabilities and seeking to respond to known security incidents in sufficient time to minimize any potential adverse impact. Generally speaking, unauthorized parties may attempt to misappropriate or compromise our confidential information or that of third parties, create system disruptions, product or service vulnerabilities or cause shutdowns. These perpetrators of cyberattacks also may be able to develop and deploy viruses, worms, malware and other malicious software programs that attack our products and services, our networks or otherwise exploit any security vulnerabilities of our products, services and networks. Because techniques used by these perpetrators to obtain unauthorized access to or sabotage systems change frequently and generally are not recognized until long after being launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. We can make no assurance that we will be able to detect, prevent, timely and adequately address, or mitigate the negative effects of cyberattacks or other security breaches.

10

A breach of our security measures as a result of third-party action, malware, employee error, malfeasance or otherwise could result in (among other consequences):

•   harm to our reputation or brand, which could lead some customers to seek to cancel subscriptions, stop using certain of our products or services, reduce or delay future purchases of our products or services, or use competing products or services;

•   individual and/or class action lawsuits, which could result in financial judgments against us or the payment of settlement amounts, which would cause us to incur legal fees and costs;

•   state or federal enforcement action, which could result in fines and/or penalties or other sanctions and which would cause us to incur legal fees and costs; and/or

•   in the event that we or one of our customers were the victim of a cyberattack or other security breach, additional costs associated with responding to such breach, such as investigative and remediation costs, and the costs of providing data owners or others with notice of the breach, legal fees, the costs of any additional fraud detection activities required by such customers' credit card issuers, and costs incurred by credit card issuers associated with the compromise and additional monitoring of systems for further fraudulent activity.

Any of these actions could materially adversely impact our business and results of operations.

Our Software Application products are an alternative to the traditional way of managing desktops, and various factors could cause this line of products and services to result in slower revenue growth than we have historically experienced.

The success of our Software Application products depends in part on organizations and customers perceiving technological and operational benefits and cost savings associated with adopting desktop and application virtualization solutions. Although we have experienced success with this platform, some customers may experience challenges in implementing desktop and application virtualization due to complexity as they may create complex deployments. In addition, our primary competition in desktop and application virtualization is the existing IT practice of managing physical desktops as devices, and the success of our Desktop and Application Virtualization products may depend on information technology executives' continuing to rethink how desktops can be delivered more effectively and efficiently. To the extent that there is slower adoption of desktop and application virtualization solutions, the revenue growth associated with our Software Application products may be slower than we have historically experienced, which could adversely affect our business, results of operations and financial condition.

We anticipate that sales of our Thin Client and Software Application products and related enhancements and upgrades will constitute a majority of our revenue for the foreseeable future. Declines and variability in demand for our Thin Client and Software Application  products could occur as a result of:

•           new competitive product releases and updates to existing products;

•           industry trend to focus on the delivery of applications especially on mobile devices;

•           introduction of potential disruptive technology by third parties;

•           termination of our product offerings and enhancements;

•           potential market saturation;

•           technological change;

•           general economic conditions;

•           complexities and cost in implementation;

•           failure to deliver satisfactory technical support;

•           dissatisfied customers; or

•           lack of success of entities with which we have a technology relationship.

 In addition, there continues to be an increase to the number of alternatives to Windows operating system powered desktops, in particular mobile devices such as smartphones and tablet computers. Users may increasingly turn to these devices to perform functions that would have been traditionally performed by desktops and laptops, which in turn may reduce the market for our Desktop and Application Virtualization products.

If our customers do not continue to purchase our Thin Client and Software Application products as a result of these or other factors, our revenue would decrease and our results of operations and financial condition would be adversely affected. In addition, modification or termination of certain of our Thin Client and Software Application products may cause variability in our revenue and make it difficult to predict our revenue growth and trends in our Thin Client and Software Application  products as our customers adjust their purchasing decisions in response to such events.

11

Risks Related to the Company’s Common Stock

There is a limited trading market for the Company’s common stock, and you may have difficulty trading and obtaining quotations for our common stock.

The Company’s common stock is registered under the Exchange Act and is quoted on the OTC Bulletin Board. There has been limited reported trading to date in our common stock. As a result, investors may find it difficult to dispose of, or to obtain accurate quotations of the price of, our securities. This severely limits the liquidity of the common stock, and may adversely affect the market price of our common stock. A limited market may also impair our ability to raise capital by selling shares of capital stock and may impair our ability to acquire other companies or assets by using common stock as consideration. 

Our common stock is currently deemed a “penny stock,” which makes it more difficult for our investors to sell their shares.

Our common stock is subject to the “penny stock” rules adopted under Section 15(g) of the Exchange Act. The penny stock rules generally apply to companies whose common stock is not listed on The Nasdaq Stock Market or other national securities exchange and trades at less than $1.00 per share, other than companies that have had average revenue of at least $6,000,000 for the last three years or that have tangible net worth of at least $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances.  Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

The rights of the holders of common stock have been impaired by the issuance of preferred stock and may be further impaired by the potential future issuance of preferred stock.

Our Board of Directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our Board of Directors has the authority to issue up to 50,000,000 shares of our preferred stock, of which 500,000 shares have been designated Series A Preferred Stock, none of which are issued and outstanding, 75,000 shares are designed as Series B Preferred Stock, all of which are issued and outstanding, and 672,000 shares have been designated as Series C Preferred Stock, all of which are issued and outstanding.

Furthermore, our board of directors has the right, without stockholder approval, to issue additional preferred stock with voting, dividend, conversion, liquidation or other rights which could adversely affect the voting power and equity interest of the holders of common stock, which could be issued with the right to more than one vote per share, and could be utilized as a method of discouraging, delaying or preventing a change of control. The possible negative impact on takeover attempts could adversely affect the price of our common stock. Although we have no present intention to issue any additional shares of preferred stock or to create any additional series of preferred stock, we may issue such shares in the future.

As an issuer of “penny stock,” the protection provided by the federal securities laws relating to forward-looking statements does not apply to the Company.

Although federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, the Company will not have the benefit of this safe harbor protection in the event of any legal action based upon a claim that the material provided by the Company contained a material misstatement of fact or was misleading in any material respect because of the Company’s failure to include any statements necessary to make the statements not misleading. Such an action could hurt our financial condition.

The Company has not paid dividends in the past and does not expect to pay dividends in the foreseeable future.  Any return on investment may be limited to the value of the Company’s common stock.

No cash dividends have been paid on the Company’s common stock. We expect that any income received from operations will be devoted to our future operations and growth. The Company does not expect to pay cash dividends in the near future. Payment of dividends would depend upon our profitability at the time, cash available for those dividends, and other factors as the Company’s board of directors may consider relevant. If the Company does not pay dividends, the Company’s common stock may be less valuable because a return on an investor’s investment will only occur if the Company’s stock price appreciates.

Our management controls the majority of our outstanding voting securities.

Our officers and directors control the majority of our voting securities. Therefore, our management will control the outcome of all corporate actions and decisions for an indefinite period of time including election of directors, amendment of charter documents and approval of mergers and other significant corporate transactions.

12

FORWARD-LOOKING STATEMENTS

Statements in this Transition Report on Form 10-K may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those described above under “Risk Factors,” and under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this current report and in other documents which we file with the Securities and Exchange Commission. In addition, such statements could be affected by risks and uncertainties related to our ability to raise any financing which we may require for our operations, competition, government regulations and requirements, pricing and development difficulties, our ability to make acquisitions and successfully integrate those acquisitions with our business, as well as general industry and market conditions and growth rates, and general economic conditions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this current report, except as required under applicable securities laws.   

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

Our corporate offices are located at 12555 Orange Drive, Suite 216, Davie, Florida 33331.  We lease 100 square feet of space for $524 per month. The lease expires on April 30, 2014.

Our U. S. Technical Support office is located at 951 Mariner-s Blvd, Suite 300, San Mateo, California 94404. We lease 500 square feet for $5,500 per month.  The lease expires on 31 May, 2014

Our U.S. sales office is located at 801 International Parkway, Suite 500, Lake Mary, FL 32746. We lease 1,200 square feet for $7,500    per month. The lease expires on March 31, 2014.

As of March 1, 2014 our new U.S. head office is located at 5535 South Williams Blvd, Suite 751, Port Orange, Florida 32128. We lease 2,300 sq feet for $2,300 per month. The lease expires on March 1, 2015

Our international administrative offices are located at The Catalyst @ University of York, Baird Lane, York YO10 5GA, North Yorkshire, UK.  We lease 900 square feet for $2,640 per month.

We believe that our existing facilities are suitable and adequate to meet our current business requirements.

ITEM 3. LEGAL PROCEEDINGS

We are not party to any material legal proceedings and no property of the Company is subject to any material legal proceedings.

 ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

13

 PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock quoted on the OTC Bulletin Board and OTCQB under the symbol “THNS.” There has been limited reported trading to date in the Company’s common stock.

The following table sets forth, for the periods indicated, the range of high and low intraday closing bid information per share of our common stock.

	High		Low
Quarter ended 03/31/12	$	2.60	$	0.015
Quarter ended 06/30/12	$	2.60	$	1.21
Quarter ended 09/30/12	$	1.95	$	1.01
Quarter ended 12/31/12	$	1.66	$	0.95
Quarter ended 03/31/13	$	2.75	$	1.19
Quarter ended 06/30/13	$	2.09	$	0.41
Quarter ended 09/30/13	$	1.55	$	0.30
Quarter ended 12/31/13	$	0.36	$	0.16

The above prices are believed to reflect representative inter-dealer quotations, without retail markup, markdown or other fees or commissions, and may not represent actual transactions.

As of March 18, 2014, there were approximately 75 holders of record of the Company’s common stock.

Dividends

The Company has never declared or paid any cash dividends on its common stock. The Company currently intends to retain future earnings, if any, to finance the expansion of its business. As a result, the Company does not anticipate paying any cash dividends in the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

Sales of Unregistered Securities

On December 20, 2013, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC (“IBC”) pursuant to which the Company sold to IBC an 8% convertible debenture in the principal amount of $150,000 (the “Debenture”). The Debenture matures on December 31, 2016 (the “Maturity Date”) and bears interest rate of 8% per annum, payable semi-annually and on the Maturity Date. IBC may convert, at any time, the outstanding principal and accrued interest on the Debenture into shares of the Company’s common stock, at Conversion Price per share at 25% of the lowest closing bid price  for the Company’s stock during the previous 20 trading days (the “Conversion Price”).

With the exception of the shares that the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the Conversion Price of the Debenture shall be subject to adjustment for issuances of common stock or securities convertible into common stock or exercisable for shares of common stock at a purchase price of less than the then-effective conversion price, on any unconverted amounts, such that the then applicable conversion price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants.

Issuer Purchases of Equity Securities

None.

ITEM 6.  SELECTED FINANCIAL DATA

Not Applicable. 

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Overview

Thinspace Technology is a cloud computing company that  develops software productivity solutions that allow its customers secure access to centrally managed Desktops or Software Applications  and to work and collaborate from anywhere, accessing enterprise apps and data on any of the latest devices, as easily as they would in their own office- simply and securely. 

Thinspace Technology cloud computing solutions help IT and service providers build both private and public clouds, leveraging virtualization and networking technologies to deliver high-performance, elastic and cost-effective services for mobile workstyles.

14

Thinspace Technology products have been designed to suit the needs of all sizes of organizations from 5 to 50,000+ users. Customers have found our products to be easier to use, faster to implement and cheaper to maintain than other similar software, which is important to small and medium sized companies or governmental offices as well as large enterprise organizations that are looking to reduce their IT infrastructure costs. We market and license our products directly to systems integrators, or SIs, in addition to indirectly through value-added resellers, or VARs, value-added distributors, or VADs, and original equipment manufacturers, or OEMs.

Thinspace Technology Limited (formerly known as Propalms Ltd), our wholly-owned subsidiary which we acquired on December 31, 2013 (“Thinspace UK”) is a United Kingdom corporation founded on October 11, 2001 and launched sales in July 2005.

Thinspace Technology Ltd. (formerly known as Propalms International Ltd) is a Nevada corporation founded on 24 August, 2010 and is a wholly-owned subsidiary of Thinspace UK.

Recent Developments

On December 6, 2013, the Circuit Court in the Twelfth Judicial Circuit in and for Sarasota County, Florida, entered an Order Granting Approval of Settlement Agreement approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance with a Settlement Agreement between the Company and IBC Funds, LLC, to convert  an aggregate of $426,908.03 of past-due accounts payable, which IBC had purchased from certain of our vendors, plus fees and costs to shares of common stock at 35% of the lowest trading price in the 20 days twenty trading period preceding the share request. IBC has contractually agreed to restrict its ability to convert the Debenture such that the number of shares of the Company common stock held by each of the Investor and its affiliates after such conversion does not exceed 9.99% of the Company’s then issued and outstanding shares of Common Stock.

Pursuant to an Agreement of Merger and Reorganization dated December 31, 2013 (the “Merger Agreement”) between the Company, VAEV Merger Sub, Inc., and  Thinspace Technology Ltd. (formerly known as Propalms Ltd.) (“Thinspace UK”), VAEV Merger Sub merged with Thinspace UK and all of the issued and outstanding shares of Thinspace UK were exchanged for 80,200,000 shares of ommon stock of the Company, representing approximately 91.6% of the outstanding shares of common stock the Company, resulting in a change in control of the Company.

Critical Accounting Policies

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our financial statements; we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments:

Use of Estimates - These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Going Concern - The financial statements have been prepared on a going concern basis, and do not reflect any adjustments related to the uncertainty surrounding our recurring losses or accumulated deficit

Revenue Recognition - We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605 “Revenue Recognition”. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title has transferred or services have been rendered, the price is fixed and determinable and collectability is reasonably assured. Revenue is not recognized on product sales transacted on a test or pilot basis. Instead, receipts from these types of transactions offset marketing expenses.

Fair Value of Financial Instruments -  Our short-term financial instruments, including cash, accounts payable and other liabilities, consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of the Company’s derivative instruments is determined using option pricing models.

Results of Operations

Eleven Months ended December 31, 2013 as compared to the Year ended January 31, 2013

15

Revenues

We currently derive our revenues from a number of software products that allow our customers secure access to centrally managed Desktops or Software Applications:

 Propalms TSE – allows you deliver single software applications to any kind of device either inside or outside the corporate network.

 Propalms One Gate- allows secure encrypted access to data or applications from outside the     corporate network.

	Propalms VDI – allows a Microsoft Windows desktop to be centrally run, managed and delivered to any kind of device.
	Pano Logic G2 – The G2 is a Zero Client that replaces traditional desktops, allows secure fast access to hosted virtual desktops
	Thin Space – A branded hardware zero thin client solution aimed for the enterprise and corporate market.

Overall, our revenues increased 41% for the eleven months ended December 31, 2013 as compared to the year ended January 31, 2013. The increase is attributable to the introduction of new products during the December 31, 2013 period, as we as to the results of increased marketing activities. While we cannot be certain that we will maintain this type of growth, we are optimistic about the recurring revenue from our products.

Cost of revenue

Cost of revenue as a percent of revenue was 43% for both the eleven months ended December 31, 2013 and for the year ended January 31, 2013. Cost of revenue consists of software development, purchased hardware and software costs and shipping costs.

Operating expense

Operating expense increased 169% for the eleven months ended December 31, 2013 compared to the year ended January 31, 2013. Our costs have increased as we have initiated the Thinspace US operations and increased our marketing and other activities,

We expect that our operating expenses will increase as our business grows and we devote additional resources towards promoting that growth, most notably reflected in anticipated increases in salaries for sales personnel and technical resources.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash. As of December 31, 2013 we had approximately $341,000 in cash and cash equivalents and a working capital deficit of $13,312,285 (resulting primarily from derivative liabilities aggregating $11,268,087), as compared to cash and cash equivalents of approximately $8,000 and a working capital deficit of $650,980 at January 31, 2013. Our recent sources of operating capital have been equity and debt financings, along with advances from related parties. In December 2013 we raised $100,000 from the sale of a convertible debenture and $672,000 from the sale of preferred stock (of which $472,000 was received in January 2014).

Our accounts receivable has increased substantially at December 31, 2013 from January 31, 2013 and reflects our increased revenues.

Net Cash Provided by Operating Activities

We used $29,514 of cash in our operating activities during the eleven months ended December 31, 2013 compared to $32,890 used by our operating activities for the year ended January 31, 2013. An increase in net loss of $1,032,897 (after adjusting for non-cash expenses) was offset by increases in accounts payable and deferred revenue.

Net Cash Used in Investing Activities

We used $36,540 for the purchase of furniture and equipment during the eleven months ended December 31, 2013, with $4,528 used during the year ended January 31, 2013.

Net Cash Provided by Financing Activities

During the eleven months ended December 31, 2013 we received $200,000 from the sale of our preferred stock and $100,000 from the sale of a convertible debenture. We acquired $9,848 pursuant to our recapitalization and also received net advances from related parties of $111,691. We repaid $12,748 of a note payable. During year ended January 31, 2013 we made note repayments of $13,431.

Financing Activities –

We are a party to a total of eighteen convertible notes aggregating an outstanding principal balance of $1,173,825 at December 31, 2013, with related accrued and unpaid interest of $209,972. Of these notes, sixteen notes, aggregating $1,073,825 of principal, are convertible at discounts to the market price of our common stock of 75% - 90%. Two notes, aggregating $100,000 principal balance, are convertible at a fixed conversion rate of $0.001 per share. The convertible notes, as amended, bear interest at a weighted average rate of 9% per year and mature in December of 2016.

16

We presently do not have any other available credit, bank financing or other external sources of liquidity. We will need to obtain additional capital in order to expand operations and become profitable. In order to obtain capital, we may need to sell additional shares of our common stock or borrow funds from private lenders. There can be no assurance that we will be successful in obtaining additional funding. We estimate that we will need additional capital of $1,800,000 for the 2014 fiscal year.

We will still need additional capital in order to continue operations until we are able to achieve positive operating cash flow. Additional capital is being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and a downturn in the equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

Our continuation as a going concern for a period longer than the current fiscal year is dependent upon our ability to obtain necessary additional funds to continue operations and expansion of our business, to determine the existence, discovery and successful exploitation of potential revenue sources that will be financed primarily through available working capital, the sales of securities and convertible debt, issuance of notes payable other debt or a combination thereof, depending upon the transaction size, market conditions and other factors.

Off-Balance Sheet Arrangements

We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

17

ITEM 8. FINANCIAL STATEMENTS

 INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F2
Consolidated Balance Sheets as of December 31, 2013 and January 31, 2013	F-3
Consolidated Statements of Operations for the eleven month period ended December 31, 2013 and year ended January 31, 2013	F-4
Consolidated Statements of Changes in Stockholders' Deficit for the year ended January 31, 2013 and the eleven month period ended December 31, 2013	F-5
Consolidated Statements of Cash Flows for the year ended January 31, 2013 and the eleven month period ended December 31, 2013	F-6
Notes to Consolidated Financial Statements	F-7 to  F-19

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Thinspace Technology, Inc.

We have audited the accompanying balance sheets of Thinspace Technology, Inc. (the “Company”) as of December 31, 2013 and January 31, 2013, and the related statements of operations, changes in stockholders’ equity, and cash flows for the eleven months ended December 31, 2013 and the year ended January 31, 2013. Thinspace Technology, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Thinspace Technology, Inc. as of December 31, 2013 and January 31 2013, and the results of its operations and its cash flows for the eleven months ended December 31, 2013 and the year ended January 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

/s/ Bedinger & Company

Concord, California

March 24, 2014

F-2

THINSPACE TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2013 AND JANUARY 31, 2013

	December 31,			January 31,
	2013			2013
Assets
Current assets:
Cash and cash equivalents	$	341,031		$	7,599
Receivable from sale of preferred stock		472,000			-
Accounts receivable		387,279			146,845
Inventory		4,634			-
Prepaid expenses and other current assets		36,263			1,440
Total current assets		1,241,207			155,884
Fixed assets, net		31,325			7,653
Intangible assets, net		194,743			249,691
Other assets		3,049			1,620
Total assets	$	1,470,324		$	414,848
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable and accrued expenses	$	1,610,753		$	281,947
Deferred revenue		1,482,504			511,061
Loans payable, current portion		74,800			13,856
Loans payable - related parties		117,348			-
Derivative liabilities		11,268,087			-
Total current liabilities		14,553,492			806,864
Deferred revenue, long term		73,897			25,740
Convertible notes payable, net of discount of $311,806		862,019
Loans payable		25,266			37,620
Total liabilities		15,514,674			870,224
Stockholders' deficit
Preferred stock, undesignated, authorized 49,253,000 shares, $0.001 par value,
no shares issued and outstanding, respectively		-			-
Preferred stock, Series B, authorized 75,000 shares, $0.001 par value,
75,000 and no shares issued and outstanding, respectively		75			-
Preferred stock, Series C, authorized 672,000 shares, $0.001 par value,
672,000 and no shares issued and outstanding, respectively		672			-
Common stock authorized 500,000,000 shares, $0.001 par value,
82,819,694 and 80,200,000 shares issued and outstanding, respectively		82,820			80,200
Additional paid in capital		-			(79,566	)
Accumulated deficit		(14,093,652	)		(454,968	)
Accumulated other comprehensive income (loss)		(34,265	)		(1,042	)
Total stockholders' deficit		(14,044,350	)		(455,376	)
Total liabilities and stockholders' deficit	$	1,470,324		$	414,848

The accompanying notes are an integral part of these consolidated financial statements.

F-3

THINSPACE TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 2013 AND THE YEAR ENDED JANUARY 31, 2013

	Eleven Months Ended			Year Ended
	December 31,			January 31,
	2013			2013
Revenues	$	1,509,286		$	1,069,612
Cost of goods sold		647,839			462,609
Gross profit		861,447			607,003
Operating expense:
Selling, general and administrative		1,979,139			696,569
Depreciation and amortization		75,066			67,222
Total operating expense		2,054,205			763,791
Loss from operations		(1,192,758	)		(156,788	)
Interest expense		(306,340	)		(1,605	)
Loss before provision for income taxes		(1,499,098	)		(158,393	)
Provision for income taxes		-			-
Net loss		(1,499,098	)		(158,393	)
Preferred dividend		(2,363,797	)		-
Net loss attributable to common shareholders	$	(3,862,895	)	$	(158,393	)
Basic and diluted loss per share	$	(0.05	)	$	(0.00	)
Weighted average shares outstanding,
Basic and diluted		80,207,843			80,200,000
Comprehensive loss:
Net loss	$	(1,499,098	)	$	(158,393	)
Foreign currency translation adjustments		(33,223	)		548
Comprehensive loss	$	(1,532,321	)	$	(157,845	)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

THINSPACE TECHNOLOGY, INC.

CONSOLIDATED STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY

FOR THE YEAR ENDED JANUARY 31, 2013 AND THE ELEVEN MONTH PERIOD ENDED DECEMBER 31, 2013

												Accumulated
									Additional			Other						Deficiency in
	Preferred Stock				Common Stock				Paid In			Comprehensive			Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital			Income (loss)			Deficit			Equity
Balance, January 31, 2012, adjusted for recapitalization		-	$	-		80,200,000	$	80,200	$	(79,570	)	$	(1,590	)	$	(296,571	)	$	(297,531	)
Foreign currency translation adjustment		-		-		-		-		4			548			(4	)		548
Net loss		-		-		-		-		-						(158,393	)		(158,393	)
Balance, January 31, 2013		-		-		80,200,000		80,200		(79,566	)		(1,042	)		(454,968	)		(455,376	)
Shares retained by Vanity shareholders
and effect of recapitalization		75,000		75		2,619,694		2,620		-			-			(10,464,589	)		(10,461,894	)
Sale of preferred stock		672,000		672		-		-		671,328			-			-			672,000
Contribution of inventory by related party		-		-		-		-		97,038			-			-			97,038
Deemed dividend - value of preferred derivative		-		-		-		-		(688,800	)		-			(1,674,997	)		(2,363,797	)
Foreign currency translation adjustments		-		-		-		-		-			(33,223	)		-			(33,223	)
Net loss		-		-		-		-		-			-			(1,499,098	)		(1,499,098	)
Balance, December 31, 2013		747,000	$	747		82,819,694	$	82,820	$	-		$	(34,265	)	$	(14,093,652	)	$	(14,044,350	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

THINSPACE TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 2013 AND THE YEAR ENDED JANUARY 31, 2013

	Eleven Months Ended			Year Ended
	December 31,			January 31,
	2013			2013
Cash flows from operating activities:
Net loss	$	(1,499,098	)	$	(158,393	)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization		75,066			67,222
Amortization of debt discount		299,964			-
Changes in operating assets and liabilities:
Accounts receivable		(232,642	)		61,151
Inventory		92,404			-
Prepaid expenses and other current assets		(32,916	)		263
Other assets		(16	)		7,149
Accounts payable and accrued expenses		275,922			12,378
Deferred revenue		991,802			(22,660	)
Net cash used in operating activities		(29,514	)		(32,890	)
Cash flows from investing activities:
Cash paid for fixed assets		(36,540	)		(4,528	)
Net cash used in investing activities		(36,540	)		(4,528	)
Cash flows from financing activities:
Proceeds from sale of preferred stock		200,000			-
Proceeds from notes payable		100,000			-
Cash acquired in recapitalization		9,848			-
Repayment of loan		(12,748	)		(13,431	)
Advances from related parties		121,058			-
Repayments to related parties		(9,367	)		-
Net cash provided by financing activities		408,791			(13,431	)
Effect of exchange rate changes on cash		(9,305	)		(1,926	)
Net increase (decrease) in cash		333,432			(52,775	)
Cash, beginning of period		7,599			60,374
Cash, end of period	$	341,031		$	7,599
Supplemental Schedule of Cash Flow Information:
Cash paid for interest	$	1,111		$	1,605
Non-cash investing and financing activities:
Contribution of inventory	$	97,038		$	-
Derivative liability of conversion feature of debt		399,964			-
Derivative liability of conversion feature of preferred stock		2,363,797			-

The accompanying notes are an integral part of these consolidated financial statements.

F-6

THINSPACE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2013 and JANUARY 31, 2013

NOTE 1 - ORGANIZATION AND LINE OF BUSINESS

COMPANY OVERVIEW

Nature of Operations

THINSPACE TECHNOLOGY, INC. (formerly Vanity Events Holding, Inc.  (the “Company” or “Thinspace” or “we” or “our”), was organized as a Delaware Corporation on August 25, 2004, and is a holding company. We are a cloud computing company that  develops software productivity solutions that allow our customers secure access to centrally managed desktops or software applications  and to work and collaborate from anywhere, accessing enterprise apps and data on any of the latest devices, as easily as they would in their own office- simply and securely.

The Company’s principal activity is the development and sale of network software. The company has 5 key products:

•   Propalms TSE - a simple management solution for Microsoft remote desktop users.

•   Propalms VPN - allows secure remote access to applications and data from outside of the corporate network.

•   Propalms VDI - allows customers to run virtual desktops on the internet.

•   Pano Logic G2 – The G2 is a Zero Client that replaces traditional desktops, allows secure fast access to hosted virtual desktops

•   Thin Space – A branded hardware Zero Client solution aimed for the enterprise and corporate market.

We sell directly to independent software vendors and Application Service Providers (ASPs) and sell to end users through a chain of distributors and resellers. The larger customers are predominantly large businesses based around the world, with a concentration in North America, the Far East and India.

Our operating subsidiaries are Thinspace Technology Ltd (“Thinspace UK”), organized and operating in the United Kingdom, and Thinspace Technology Ltd. (“Thinspace USA”), a Nevada corporation formed on August 24, 2010 and operating in the states of California, Colorado and Florida.

Pursuant to an Agreement of Merger and Reorganization dated December 31, 2013 (the “Agreement”) between Vanity Events Holding, Inc., VAEV Merger Sub, Inc., and Thinspace UK, VAEV Merger Sub merged with Thinspace UK and all of the issued and outstanding shares of Thinspace UK were exchanged for 80,200,000 common shares of Vanity Events Holding, Inc. The transaction has been accounted for as a reverse acquisition of Vanity by Thinspace UK but in substance as a capital transaction, rather than a business combination since Vanity had minimal operations and assets as of the closing of the transaction. The stockholders of Thinspace UK own a majority of the Company’s voting power immediately following the transaction and Thinspace UK’s management has assumed operational, management and governance control. The transaction is deemed as reverse recapitalization and the accounting is similar to that resulting from a reverse acquisition, except that no goodwill or other intangible assets should be recorded.  Thinspace UK is treated as the surviving and continuing entity.   The Company did not recognize goodwill or any intangible assets in connection with this transaction. Accordingly, the Company’s historical financial statements are those of Thinspace UK and its subsidiary, Thinspace USA.

Vanity assets and liabilities retained subsequent to the transaction are as follows:

Cash	$	9,848
Other assets		1,349
Accounts payable and accrued expenses		(1,032,603	)
Notes payable		(922,019	)
Derivative liabilities		(8,504,326	)
Net liabilities retained	$	(10,447,751	)

We have changed the fiscal year end of Thinspace UK and Thinspace USA to December 31 to match that of Vanity Events year end prior to merger. Therefore, our statements of operations, cash flows and changes in stockholders’ equity for the periods ended December 31, 2013 cover an eleven month period.

F-7

BASIS OF PRESENTATION AND GOING CONCERN

Basis of Presentation

We have incurred a net loss of $1,499,098 for the eleven months ended December 31, 2013. As of December 31, 2013 we have negative working capital of $13,312,285 and a stockholders’ deficit of $14,044,350. As a result, there is substantial doubt about the Company’s ability to continue as a going concern at December 31, 2013.

Management has implemented its business plan to add new products, increase marketing activities and, as a result, increase revenue. Our ability to implement our current business plan and continue as a going concern ultimately is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and to achieve profitable operations.

There can be no assurances that funds will be available to the Company when needed or, if available, that such funds would be available under favorable terms. In the event that the Company is unable to generate adequate revenues to cover expenses and cannot obtain additional funds in the near future, the Company may seek protection under bankruptcy laws.  To date, management has not considered this alternative, nor does management view it as a likely occurrence, since the Company is progressing with various potential sources of new capital and we anticipate a successful outcome from these activities. However, capital markets remain difficult and there can be no certainty of a successful outcome from these activities. 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.   

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Thinspace Technology, Inc. and its wholly-owned subsidiaries, Thinspace UK and Thinspace USA. All material inter-company accounts and transactions have been eliminated.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

For the purpose of the statements of cash flows, we consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

ACCOUNTS RECEIVABLE

Accounts receivable are reported at the customers' outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The Company evaluates receivables on a regular basis for potential reserve.The accounts receivable balances of $387,279 and $146,845 as of December 31, 2013 and January 31, 2013, respectively, do not included an allowance for doubtful accounts as the Company anticipates payment on all accounts within the next fiscal year. The Company routinely evaluates accounts receivable for uncollectible amounts.

F-8

REVENUE RECOGNITION

Certain volume licensing arrangements include a perpetual license for current products combined with rights to receive unspecified future versions of software products, which the Company has determined are additional software products and are therefore accounted for as subscriptions, with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period. Arrangements that include term based licenses for current products with the right to use unspecified future versions of the software during the coverage period are also accounted for as subscriptions, with revenue recognized ratably over the coverage period.

Revenue from cloud-based services arrangements that allow for the use of a hosted software product or service over a contractually determined period of time without taking possession of software are accounted for as subscriptions with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period beginning on the date the service is made available to customers.

Some volume licensing arrangements include time-based subscriptions for cloud-based services and software offerings that are accounted for as subscriptions. These arrangements are considered multiple element arrangements. However, because all elements are accounted for as subscriptions and have the same coverage period and delivery pattern, they have the same revenue recognition timing.

DEFERRED REVENUE

Deferred revenue related to support and maintenance is recorded in a manner consistent with the Company’s revenue recognition policy. The Company typically enters into one-year upgrade and maintenance contracts with its customers. The upgrade and maintenance contracts are generally paid in advance but can be billed monthly or quarterly. The Company defers such payment and recognizes revenue ratably over the contract period.

LONG-LIVED ASSETS

We assess the carrying value of long-lived assets in accordance with ASC 360, "Property, Plant and Equipment". We assess the impairment of identifiable intangibles and long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important that could trigger an impairment review include, but are not limited to, the following: a significant underperformance to expected historical or projected future operating results, a significant change in the manner of the use of the acquired asset or the strategy for the overall business, or a significant negative industry or economic trend.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to operations.

The Company depreciates its property and equipment on a straight-line basis with estimated useful lives of three to four years.

F-9

INTANGIBLE ASSETS

The intangible assets of the Company are subject to amortization and are amortized using the straight-line method over their estimated period of benefit of 10 years. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired.

INVENTORY

The Company values its inventory at the lower of cost (first-in, first-out) or market. The Company uses estimates and judgments regarding the valuation of inventory to properly value inventory. Inventory adjustments are made for the difference between the cost of the inventory and the estimated realizable value and charged to cost of goods sold in the period in which the facts that give rise to the adjustments become known.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Our short-term financial instruments, including cash, accounts receivable and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their terms.

Fair value measurements

ASC 820 “Fair Value Measurements and Disclosure” establishes a framework for measuring fair value and expands disclosure about fair value measurements. 

ASC 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes the following three levels of inputs that may be used:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  

In accordance with ASC 820, the following table represents the Company's fair value hierarchy for its financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2013:

	Level 1		Level 2		Level 3		Total
Liabilities
Conversion and warrant derivative liabilities		-		-		11,268,087		11,268,087
Total Liabilities	$	-	$	-	$	11,268,087	$	11,268,087

F-10

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (conversion and warrant derivative liabilities) for the eleven month period ended December 31, 2013.

	2013
Balance at beginning of year	$	-
Additions to derivative instruments		11,268,087
Change in fair value of warrant liability		-
Balance at end of period	$	11,268,087

The following is a description of the valuation methodologies used for these items:

Conversion derivative liability — these instruments consist of certain of our notes which are convertible based on a discount to the market value of our common stock. These instruments were valued using pricing models which incorporate the Company’s stock price, volatility, U.S. risk free rate, dividend rate and estimated life.

CONCENTRATIONS OF CREDIT RISK

The Company performs ongoing credit evaluations of its customers. At December 31, 2013, two customers accounted for 27% or more of accounts receivable. At January 31, 2013, one customer accounted for 38% or more of accounts receivable.

The Company maintains cash and cash equivalents with major financial institutions. Cash held in US bank accounts is insured up to $250,000 at each institution. Cash held in UK bank accounts is insured up to £85,000 at December 31, 2013 (approximately $140,000 at December 31, 2013) at each institution for each entity.  At times, cash balances may exceed the insured limits. The Company has not experienced any loss on these accounts.  The balances are maintained in demand accounts to minimize risk.

RESEARCH AND DEVELOPMENT

Expenses related to present and future products are expensed as incurred.

FOREIGN CURRENCY TRANSLATION

The financial statements of the Company’s U.K. subsidiary, Thinspace UK, are measured using the British Pound as the functional currency. Assets, liabilities and equity accounts of the company are translated at exchange rates as of the balance sheet date or historical acquisition date, depending on the nature of the account. Revenues and expenses are translated at average rates of exchange in effect throughout the year. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders' equity. The financial statements are presented in United States of America dollars.

LOSS PER SHARE

We use ASC 260, “Earnings Per Share” for calculating the basic and diluted income (loss) per share. We compute basic income (loss) per share by dividing net income (loss) and net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding.

Dilutive common stock equivalents consist of shares issuable upon conversion of debt and preferred stock and the exercise of our stock warrants. There were 165,140,070 common share equivalents at December 31, 2013 and none at January 31, 2013, which have been excluded from the computation of the weighted average diluted shares.   

F-11

INCOME TAXES

We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.    

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance, which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax provisions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

The Company has made a comprehensive review of its portfolio of uncertain tax positions in accordance with recognition standards established by the guidance. As a result of this review, the Company concluded that at this time there are no uncertain tax positions that would result in tax liability to the Company.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” ("ASU No. 2013-02").  ASU No. 2013-02 provides updated guidance to improve the reporting of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to present, either on the face of the statement of income or in the notes, separately for each component of comprehensive income, the current period reclassifications out of accumulated other comprehensive income by the respective line items of net income affected by the reclassification. The updated guidance was effective prospectively for reporting periods beginning after December 15, 2012. The Company adopted the updated guidance effective February 1, 2013, and such adoption did not have any effect on the Company's results of operations, financial position or liquidity.

In July 2013, the FASB issued Accounting Standards Update No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" ("ASU No. 2013-11"). ASU No. 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with limited exceptions. ASU No. 2013-11 is effective for interim and annual periods beginning after December 15, 2013 and may be applied retrospectively. The adoption of the provisions of ASU No. 2013-11 is not expected to have a material impact on the company's financial position or results of operations.

In March 2013, the FASB issued Accounting Standards Update No. 2013-05, "Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity" ("ASU No. 2013-05"). ASU No. 2013-05 requires an entity that ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. ASU No. 2013-05 is effective for interim and annual periods beginning after December 15, 2013, with early adoption permitted and is to be applied prospectively. The adoption of the provisions of ASU No. 2013-05 is not expected to have a material impact on the company's financial position or results of operations.

F-12

Other recent accounting pronouncements issued by the FASB and the SEC did not, or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

NOTE 3 – PROPERTY AND EQUIPMENT

 Property and equipment consists of the following:

	December 31,			January 31,
	2013			2013
Office equipment and furniture	$	91,637		$	51,950
Accumulated depreciation		(60,312	)		(44,297	)
Carrying value	$	31,325		$	7,653

Depreciation expense for the eleven months ended December 31, 2013 and the year ended January 31, 2013 was $13,602 and $4,672, respectively. 

NOTE 4 – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	December 31,			January 31,
	2013			2013
Developed technology	$	649,159		$	624,237
Accumulated amortization		(454,416	)		(374,546	)
Carrying value	$	194,743		$	249,691

Technology-based intangible assets included software to be sold, leased, or otherwise marketed.

Amortization expense for the eleven months ended December 31, 2013 and the year ended January 31, 2013 was $61,464 and $62,550, respectively. The Company estimates they have no significant residual value related to the intangible assets. No material impairments of intangible assets were identified during any of the periods presented.

NOTE 5 – INVENTORY

Inventory at December 31, 2013 consists of finish goods purchased hardware that is sold in connection with our software products.

During the eleven months ended December 31, 2013 we acquired inventory from a related party. We have valued this inventory at $97,038 and have recorded this amount as a contribution to capital.

F-13

NOTE 6 –DERIVATIVE LIABILITIES

The Company has identified certain embedded derivatives related to its convertible notes, convertible preferred stock, common stock purchase warrants and a debt purchase agreement. Since certain of the notes, the preferred stock and the debt settlement agreement are convertible into a variable number of shares, the conversion features of those debentures are recorded as derivative liabilities. Since the warrants have a price reset feature, they are recorded as derivative liabilities. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to adjust to fair value as of each subsequent balance sheet date. 

Convertible Notes and Debt Settlement Agreement

At December 31, 2013, we recalculated the fair value of the embedded conversion feature of our notes and debt settlement agreement subject to derivative accounting and have determined that their fair value at December 31, 2013 was $7,719,873. The value of the conversion liabilities was determined using the Black-Scholes method based on the following assumptions:  (1) risk free interest rate of 0.69%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 432% and (4) an expected life of 3 years.

Convertible Preferred Stock

At December 31, 2013, we recalculated the fair value of the embedded conversion feature of our preferred stock subject to derivative accounting and have determined that their fair value at December 31, 2013 was $2,663,687. The value of the conversion liabilities was determined using the Black-Scholes method based on the following weighted average assumptions:  (1) risk free interest rate of 0.19%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 242% and (4) an expected life of 1.15 years.

Warrant Liabilities

At December 31, 2013, we recalculated the fair value of the warrants containing a price reset feature subject to derivative accounting and have determined that the fair value at December 31, 2013 was $884,527. The value of the warrant liabilities was determined using the Black-Scholes method based on the following weighted average assumptions:  (1) risk free interest rate of 0.09%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 195% and (4) an expected life of 0.53 years.

NOTE 7 – CONVERTIBLE NOTES PAYABLE

We are a party to a total of eighteen convertible notes aggregating an outstanding principal balance of $1,173,825 at December 31, 2013, with related accrued and unpaid interest of $209,972. Of these notes, sixteen notes, aggregating $1,073,825 of principal, are convertible at discounts to the market price of our common stock of 75% - 90%. Two notes, aggregating $100,000 principal balance, are convertible at a fixed conversion rate of $0.001 per share. The convertible notes, as amended, bear interest at a weighted average rate of 9% per year and mature in December of 2016. Debt discount of $311,806 will be amortized over the remaining lives of the related notes.

IBC Funds LLC $100,000 Debenture

On December 31, 2013, the Company entered into a Securities Purchase Agreement with CP US Income Group, LLC (CP US), an accredited investor, providing for the sale by the Company to CP US of an 8% convertible debenture in the aggregate principal amount of $100,000 (such balance being included in the balance noted in the preceding paragraph). The CP US debenture matures on December 31, 2016 and bears interest a rate of 8% per annum, payable annually. The Investor may convert, at any time, the outstanding principal and accrued interest on the CP debenture into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) at a conversion price that is seventy five percent (75%) discount of the low closing bid price of the Common Stock during the twenty (20) trading days immediately preceding the conversion date. The Conversion Price may be adjusted pursuant to the other terms of this Debenture.

F-14

The conversion feature of the CP US debenture contains a variable conversion rate. As a result, we have classified the conversion feature as a derivative liability in the financial statements. At issue, we have recorded a conversion feature liability of $399,964. The value of the conversion feature liability was determined using the Black-Scholes method based on the following assumptions:  (1) risk free interest rate of 0.625%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 432%; and (4) an expected life of 3 years. The Company has allocated $100,000 to debt discount, to be amortized over the life of the debt, with the balance of $299,964 being charged to expense at issue.

NOTE 8 – LOANS PAYABLE

Loan payable consisted of the following:

	December 31,			January 31,
	2013			2013
Bank loan payable	$	40,066		$	51,476
Demand loans payable		60,000			-
		100,066			51,476
Current portion		(74,800	)		(13,856	)
Long term portion	$	25,266		$	37,620

The Company is obligated under a bank loan bearing interest at a rate of 2.2% over the bank’s base rate, maturing in 2016.

The Company is obligated under a note payable in the amount of $10,000. The note bears interest at 10% per year and matured on December 31, 2013.

The Company has received funds from an accredited investor, as a non-interest-bearing loan, without formal loan agreements and terms. The amounts received were $50,000, and were loaned as an accommodation to the Company. These advances remain outstanding at December 31, 2013.

NOTE 9 – LOANS PAYABLE – RELATED PARTY

Entities controlled by certain shareholders have provided short term working capital loans to the Company aggregating approximately $121,000 during the eleven months ended December 31, 2013. The loans bear a weighted average effective interest rate of 13.5%. The Company repaid approximately $9,000 in 2013.

Interest expense related to these loans of $5,264 has been recorded for the eleven months ended December 31, 2013

NOTE 10 – DEFERRED REVENUE

Deferred revenue consists of funds received in advance of services being performed. At December 31, 2013 and January 31, 2013, the deferred revenue balance consisted of the following:

	December 31,		January 31,
	2013		2013
Deferred revenue due within one year	$	1,482,504	$	511,061
Deferred revenue due after one year		73,897		25,740
Carrying value	$	1,556,401	$	536,801

F-15

Unearned revenue comprises mainly unearned revenue from sales and licensing of software programs, and payments for products and services for which the Company has been paid in advance and we earn the revenue as we provide the service or software or otherwise meet the revenue recognition criteria.

Unearned revenue from sales and licensing of software programs represents customer billings for multi-year licensing arrangements paid either at inception of the agreement or annually at the beginning of each coverage period and accounted for as subscriptions with revenue recognized ratably over the coverage period.

NOTE 11– RELATED PARTY TRANSACTIONS

An entity owned by certain of our shareholders provided management services to the Company. Fees incurred for the eleven months ended December 31, 2013 and the year ended January 31, 2013 were $277,940 and $144,480, respectively.

NOTE 12 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue 50,000,000 shares of preferred stock, with par value of $0.001 per share, of which 75,000 shares have been designated as Series B 10% Convertible preferred stock, with par value of $0.001 per share, and 672,000 shares have been designated as Series C Convertible preferred stock. There were 75,000 Series B shares and 672,000 Series C shares issued and outstanding as of December 31, 2013.

Each share of Series B Preferred Stock has a stated value equal to $1.00 per share and is initially convertible at any time into shares of the Company’s common stock at a conversion price equal to $0.60 per share or an aggregate of 125,000 shares of the Company’s common stock.  The conversion price of the Series B Preferred Stock is subject to full ratchet and anti-dilution adjustment for subsequent lower price issuances by the Company, as well as customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like.

Each holder of Series C Preferred Stock shall have the right to convert all (but not part) of such holder’s shares of Series C Convertible Preferred Stock such that each share of Series C Convertible Preferred Stock shall convert into that number of fully paid and non-assessable shares of Common Stock equal to the of the number of preferred shares divided by the lowest closing bid price during the twenty trading days prior to the notice of conversion multiplied by .25 (one-fourth).

We sold 672,000 shares of Series C Preferred Stock on December 31, 2013 and received proceeds of $672,000 (of which $200,000 was received on December 31, 2013 and $472,000 was received in January 2014). Because the shares are convertible at a discount to market value of our common shares, we have recorded a derivative liability for the conversion feature in the amount of $2,363,797. This amount is reflected as a deemed dividend to the preferred shareholders.

Common Stock

The Company is authorized to issue 500,000,000 shares of common stock, with par value of $0.001 per share. As of December 31, 2013 and January 31, 2013, there were 82,819,694 and 80,200,000 shares of common stock issued and outstanding, respectively, after giving effect to the recapitalization.

Warrants Outstanding

At December 31, 2013 we have an aggregate of 4,306,932 common stock purchase warrants outstanding and exercisable. The warrants currently have an exercise price of $0.0625 per share. The warrants expire on various dates between April 5, 2014 and November 10, 2014 and have a weighted average remaining life of 0.53 years at December 31, 2013. The warrants contain a price reset feature and are accounted for as derivative liabilities.

F-16

NOTE 13 - PROVISION FOR INCOME TAXES

The Company utilizes ASC 740 “Income Taxes”, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

For the eleven months ended December 31, 2013 and the year ended January 31, 2013, the Company had available for U.S federal income tax purposes net operating loss carryovers of approximately $529,000 and $0, respectively, which expire beginning in 2033. The net operating loss carryovers may be subject to limitations under Internal Revenue Code due to significant changes in the Company’s ownership. The Company has provided a full valuation allowance against the full amount of the net operating loss benefit, since, in the opinion of management, based upon the earnings history of the Company it is more likely than not that the benefits will not be realized.  

For the eleven months ended December 31, 2013 and the year ended January 31, 2013, the Company had available for UK income tax purposes net operating loss carryovers of approximately $651,000 and $455,000, respectively, which can be carried forward indefinitely. The Company has provided a full valuation allowance against the  amount of UK unused net operating loss benefit, since  management believes that, based upon the earnings history of the Company, it is more likely than not that the benefits will not be realized.

The income tax provision (benefit) consists of the following:

	December 31, 2013			January 31, 2013
Federal:
Current	$	-		$	-
Deferred		368,000			44,000
		368,000			44,000
State and local:
Current		-			-
Deferred		21,000			-
		21,000			-
Change in valuation allowance		(389,000	)		(44,000	)
Income tax provision (benefit)	$	-		$	-

The provision for income taxes differ from the amount of income tax determined by applying the applicable U.S statutory rate to losses before income tax expense for the eleven months ended December 31, 2013 and the year ended January 31, 2013 as follows:

	December 31, 2013			January 31, 2013
Statutory federal income tax rate		(34.0	%)		(34.0	%)
Statutory state and local income tax rate (6%), net of federal benefit		(4.0	%)		(4.0	%)
Foreign tax rate differentials		4.5	%		10.0	%
Derivative liabilities adjustments		7.6	%		-
Change in valuation allowance		25.9	%		28.0	%
Effective tax rate		0.00	%		0.00	%

F-17

Deferred income taxes result from temporary differences in the recognition of income and expenses for financial reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following:

	December 31,				January 31,
	2013				2013
Deferred tax assets:
Net operating loss carry forward		$	516,000			$	127,000
Less:  valuation allowance			(516,000	)			(127,000	)
Net deferred tax asset		$	-			$	-

The Company has filed its tax returns for periods through January 31, 2013.

The provisions of ASC 740 require companies to recognize in their financial statements the impact of a tax position if that position is more likely than not to be sustained upon audit, based upon the technical merits of the position. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure.

Management does not believe that the Company has any material uncertain tax positions requiring recognition or measurement in accordance with the provisions of ASC 740. Accordingly, the adoption of these provisions of ASC 740 did not have a material effect on the Company’s financial statements. The Company’s policy is to record interest and penalties on uncertain tax positions, if any, as income tax expense.

All tax years for the Company remain subject to future examinations by the applicable taxing authorities.

NOTE 14 - COMMITMENTS AND CONTINGENCIES

LEASE

We currently occupy office space pursuant to various short term leases expiring in 2014.

Rent expense for the eleven months ended December 31, 2013 and the year ended January 31, 2013 was $153,507 and $53,723, respectively.

LITIGATION

From time to time, The Company and its subsidiaries may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.  However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. The Company and its subsidiaries are currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.  

NOTE 15 - SUBSEQUENT EVENTS

During January 2014 we paid $360,000 pursuant to a consulting agreement for strategic advisory services. We also issued 5,000,000 shares of common stock as additional compensation pursuant to the agreement. The term of the agreement covers the 2014 calendar year.

During January 2014 we cancelled 250,000 shares of common stock which had been issued by Vanity in July of 2012 as payment for consulting services, pursuant to an agreement with the consultant.

During February 2014 we issued an aggregate of 4,051,870 shares of common stock upon the conversion of $191,184 of notes and $11,409 of accrued interest.

IBC 150K Financing

On February 21, 2014, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC (“IBC”) pursuant to which the Company sold to IBC an 8% convertible debenture in the principal amount of $150,000 (the “Debenture”). The Debenture matures on the third anniversary of the date of issuance (the “Maturity Date”) and bears interest at a rate of 8% per annum, payable semi-annually and on the Maturity Date. IBC may convert, at any time, the outstanding principal and accrued interest on the Debenture into shares of the Company’s common stock, at a conversion per share at 25% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days.

With the exception of the shares that the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the conversion price of the Debenture shall be subject to adjustment for issuances of common stock or securities convertible into common stock or exercisable for shares of common stock at a purchase price of less than the then-effective conversion price, on any unconverted amounts, such that the then applicable conversion price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants.

IBC 50K Financing

On March 21, 2014, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC (“IBC”) pursuant to which the Company sold to IBC an 8% convertible debenture in the principal amount of $50,000 (the “Debenture”). The Debenture matures on the third anniversary of the date of issuance (the “Maturity Date”) and bears interest at a rate of 8% per annum, payable semi-annually and on the Maturity Date. IBC may convert, at any time, the outstanding principal and accrued interest on the Debenture into shares of the Company’s common stock, at a conversion per share at 25% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days.

With the exception of the shares that the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the conversion price of the Debenture shall be subject to adjustment for issuances of common stock or securities convertible into common stock or exercisable for shares of common stock at a purchase price of less than the then-effective conversion price, on any unconverted amounts, such that the then applicable conversion price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants.

F-18

Greystone 50K Financing

On March 21, 2014, the Company entered into a Securities Purchase Agreement with Greystone Capital Partners, Inc. (“Greystone”) pursuant to which the Company sold to Greystone at an 8% convertible debenture in the principal amount of up to $50,000 (the “Debenture”). The Debenture matures on the third anniversary of the date of issuance (the “Maturity Date”) and bears interest a rate of 8% per annum, payable semi-annually and on the Maturity Date. Greystone may convert, at any time, the outstanding principal and accrued interest on the Debenture into shares of the Company’s common stock, at a conversion the conversion price per share at 25% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days (the “Conversion Price”).

With the exception of the shares that the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the conversion price of the Debenture shall be subject to adjustment for issuances of common stock or securities convertible into common stock or exercisable for shares of common stock at a purchase price of less than the then-effective conversion price, on any unconverted amounts, such that the then applicable conversion price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants.

Greystone 50K Financing

On March 26, 2014, the Company entered into a Securities Purchase Agreement with Greystone Capital Partners, Inc. (“Greystone”) pursuant to which the Company sold to Greystone at an 8% convertible debenture in the principal amount of up to $50,000 (the “Debenture”). The Debenture matures on the third anniversary of the date of issuance (the “Maturity Date”) and bears interest a rate of 8% per annum, payable semi-annually and on the Maturity Date. Greystone may convert, at any time, the outstanding principal and accrued interest on the Debenture into shares of the Company’s common stock, at a conversion price per share at 25% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days (the “Conversion Price”).

With the exception of the shares that the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the conversion price of the Debenture shall be subject to adjustment for issuances of common stock or securities convertible into common stock or exercisable for shares of common stock at a purchase price of less than the then-effective conversion price, on any unconverted amounts, such that the then applicable conversion price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants.

F-19

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this Annual Report, we conducted an evaluation, under the supervision and with the participation of our President and our Chief Executive Officer (principal executive and financial officers), of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our President and our Chief Executive Officer concluded that the Company’s disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and which also are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s President and it’s Chief Executive Officer, to allow timely decisions regarding required disclosure.

Management's Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting of the Company. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management, with the participation of our President and our Chief Executive Officer, have evaluated the effectiveness of our internal control over financial reporting as of December 31, 2013 based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that, as of December 31, 2013, our internal control over financial reporting is not effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

While we have engaged a third party accountant who is a certified public accountant to provide accounting and financial reporting services to us, we lack both an adequate number of personnel with requisite expertise in the key functional areas of finance and accounting and an adequate number of personnel to properly implement control procedures. In addition, while we have independent directors, we do not have an audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures. These factors represent material weaknesses in our internal controls over financial reporting. Although we believe the possibility of errors in our financial statements is remote, and expect to continue to use a third party accountant to address shortfalls in staffing and to assist us with accounting and financial reporting responsibilities in an effort to mitigate the lack of segregation of duties, until such time as we expand our staff with qualified personnel, we expect to continue to report material weaknesses in our internal control over financial reporting.

This report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to permanent rules of the SEC that permit the Company to provide only management’s report in this annual report.

Changes in internal controls

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 under the Exchange Act that occurred during the quarter ended December 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

18

 PART III

ITEM 10. DIRECTORS, OFFICERS AND CORPORATE GOVERNANCE.

Below are the names and certain information regarding the Company’s executive officers and directors. Directors serve until the next annual meeting of stockholders or until their successors are elected and qualified. Officers serve at the discretion of the Board of Directors.  

Name	Position	Age
Robert Zysblat	President and  Director	57
Owen Dukes	Chief Executive Officer and Director	45
Michael Brodsky	Director	42

Business Experience

The following is a brief account of the education and business experience during at least the past five years of each director and executive officer, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

Robert Zysblat – President and Director – Mr. Zysblat has been President and director of the Company since December 31, 2013. Mr. Zysblat has an entrepreneurial track record in the security software industry and has successfully led and sold a number of significant messaging companies. In 1996 he purchased 100% of the shares of Computer Communications Ltd, becoming its CEO, and successfully sold this business in an management buyout in July 2001. In December 2000, he purchased 5th Generation Messaging, becoming its CEO and sold all his stock in July 2002. In September 2002, he purchased MSS communications becoming its Chairman, and sold the business in 2004. Mr. Zysblat has been with Thinspace Technology Ltd . since July 2005. He was appointed CFO and became a director of Jenna Lane in December 2006 and assumed the positions of Chairman and Chief Financial Officer as part of the merger with Propalms in January 2007. In September 2010, Mr Zysblat led a successful management buyout of Propalms Ltd from its parent company. Mr. Zysblat’s experience as President of Thinspace qualifies him to serve as a director of the Company.

Owen Dukes – Chief Executive Officer and Director- Mr. Dukes has served as the Company’s Chief Executive Officer and Director since December 31, 2013. In July 2005, Mr. Dukes became a director of Thinspace Technology    Ltd. and upon its formation in 2006, he was appointed CEO of Thinspace Technology    Ltd. Mr. Dukes has twenty years of extensive industry experience. He worked for Phoenix Software, the leading Microsoft reseller, as their UK channel manager from 1993 to 2000. Mr. Dukes then worked as Business Development Manager for Surf Control PLC, from 2000 to 2001, developing their UK market to a multi-million pound enterprise. Also in 2000, he launched Arc Technology Distribution Ltd, and purchased two other distributors, Unidirect Ltd and IPconnect Ltd. Mr. Dukes resigned from ARC in 2006. Mr. Dukes was appointed CEO and a director of Jenna Lane in December 2006 and assumed those same positions as part of the merger with Thinspace Technology    Ltd. in January 2007.In September 2010, Mr Dukes led a successful management buyout of Propalms Ltd from its parent company. Mr. Dukes’s experience as Chief Executive Officer of Thinspace qualifies him to serve as a director of the Company.

Michael Brodsky – Director.   Mr. Brodsky has been director of the Company since February 27, 2012. Mr. Brodsky has served as president of Thalia Woods Management, Inc., a company that makes direct investments in public and private companies, since June 2009.  From April 2004 to June 2009, Mr. Brodsky served as president and chief executive officer of Venture Investment Group, a company that makes direct investments in public and private companies.  From February 2007 to May 2008, Mr. Brodsky served as manager in charge of worldwide logistics at Resnick Supermarket Equipment Corp. Mr. Brodsky’s experience as an investor in public and private companies gives him the qualifications and skill to serve as a director.

Board Leadership Structure and Role in Risk Oversight

We have not adopted a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined. These roles are not currently combined, with Mr. Dukes serving as Chief Executive Officer and Mr. Zysblat serving as Chairman.

Our board of directors is primarily responsible for overseeing our risk management processes. The board of directors receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding our company’s assessment of risks. The board of directors focuses on the most significant risks facing our company and our company’s general risk management strategy, and also ensures that risks undertaken by our Company are consistent with the board’s appetite for risk. While the board oversees our company’s risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our board leadership structure supports this approach.

19

Involvement in Certain Legal Proceedings

To our knowledge, our directors and executive officers have not been involved in any of the following events during the past ten years:  

1. any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;  

2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);   

3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities; 

4. being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;   

5. being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or    

6. being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Code of Ethics

We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions because of the small number of persons involved in the management of the Company.

Nominating Committee

We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.

Audit Committee

The Board of Directors acts as the Audit Committee and the Board has no separate committees. The Company has no qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10% of the issued and outstanding shares of our common stock to file reports of initial ownership of common stock and other equity securities and subsequent changes in that ownership with the SEC. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. To our knowledge, during the fiscal year ended December 31, 2013, all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with, except as set forth below.

Philip Ellett filed a late Form 3.

Michael Brodsky did not file a Form 3. The Form 3 has since been filed.

Scott Weiselberg did not file a Form 3.

20

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth all compensation paid in respect of Thinspace Technology’s   principal executive officers. No other officer of Thinspace Technology received compensation in excess of $100,000 for our last two completed fiscal years.

SUMMARY COMPENSATION TABLE

							Change in Pension
							Value &
						Non-Equity	Non-qualified
						Incentive	Deferred	All
				Stock	Option	Plan	Compensation	Other
Name and Principal		Salary	Bonus	Awards	Awards	Compensation	Earnings	Compensation	Totals
Position	Period	($)	($)	($)	($)	(S)	($)	($)	($)
Owen Dukes, CEO (1)	Eleven months ended December 31, 2013	-	-	-	-	-	-	-	-
	Year ended January 31, 2013	-	-	-	-	-	-	-	-
Robert  Zysblat, President (1)	Eleven months ended December 31, 2013	-	-	-	-	-	-	-	-
	Year ended January 31, 2013	-	-	-	-	-	-	-	-

(1) An entity owned by Mr. Dukes and Zysblat  provided management services to the Company. Fees incurred for the eleven months ended December 31, 2013 and the year ended January 31, 2013 were $277,940 and $144,480, respectively.

The following summary compensation table sets forth information concerning compensation for services rendered in all capacities during 2013 and 2012 awarded to, earned by or paid to Vanity’s executive officers.

							Change in Pension
							Value &
						Non-Equity	Non-qualified
						Incentive	Deferred	All
				Stock	Option	Plan	Compensation	Other
Name and Principal		Salary	Bonus	Awards	Awards	Compensation	Earnings	Compensation	Totals
Position	Year	($)	($)	($)	($)	(S)	($)	($)	($)
Philip Ellett, CEO	2013  2012	28,000 14,000	- -	- -	- -	- -	- -	- -	28,000 14,000
Lloyd Lapidus, Interim CEO	2013 2012	- 54,680	- -	- -	- -	- -	- -	- -	- 54,680

(1) Mr. Ellett was appointed CEO, CFO and Chairman of the Company on October 9, 2012 and resigned on December 31, 2013.

(2) Mr. Lapidus was appointed interim CEO of the Company on April 6, 2011 and resigned as CEO on October 4, 2012.

Employment Agreements

On November 7, 2012 the Company entered into an employment agreement (the “Ellett Agreement”) with Philip Ellett to serve as Chief Executive Officer (CEO), Chief Financial Officer (CFO), Principal Executive Officer, Principal Financial Officer and Secretary. The Ellett Agreement had an initial term of month to month. The base salary under the Ellett Agreement was a monthly gross salary of $7,000.  On December 31, 2013 Mr. Ellett resigned as Chief Executive Officer (CEO), Chief Financial Officer (CFO), Principal Executive Officer, Principal Financial Officer and Secretary.

On December 31, 2013 the Company entered into an employment agreement (the “Dukes Agreement”) with Owen Dukes to serve as Chief Executive Officer (CEO) The Agreement has an initial term of five years.  The base salary under the Dukes Agreement is an annual gross salary of $180,000.

On December 31, 2013 the Company entered into an employment agreement (the “Zysblat Agreement”) with Robert Zysblat to serve as President and Chairman of the Board.  The Zysblat Agreement has an initial term of five years.  The base salary under the Zysblat Agreement is an annual gross salary of $180,000.

Outstanding Equity Awards at Fiscal Year-End

None.

Director Compensation

No director of the Company received any compensation for services as director for the year ended December 31, 2013.

21

Risk Management

The Company does not believe risks arising from its compensation policies and practices for its employees are reasonably likely to have a material adverse effect on the Company.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information, as of March 18, 2014 with respect to the beneficial ownership of the Company’s outstanding common stock by (i) any holder of more than five (5%) percent; (ii) each of the Company’s executive officers and directors; and (iii) the Company’s directors and executive officers as a group. Except as otherwise indicated, each of the stockholders listed below has sole voting and investment power over the shares beneficially owned.

Beneficial ownership is determined in accordance with the rules of the SEC. Unless otherwise indicated in the table, the persons and entities named in the table have sole voting and sole investment power with respect to the shares set forth opposite the shareholder’s name.

Name and Address of Beneficial Owner	Amount and Nature of  Beneficial Ownership		Percentage of  Class (1)
Robert Zysblat		38,500,000		42	%
Owen Dukes		38,500,000		42	%
Michael Brodsky(2)		250,000		0.3	%
Sullivan Wayne Partners, LLC		5,000,000		5.5	%
All officers and directors as a group (3 persons)		77,250,000		84.3	%

(1) Percentage of ownership is based on 91,621,564 shares of common stock issued and outstanding as of March 18, 2014.

(2) Represents shares of common stock issuable upon conversion of 75,000 shares of Series B Preferred Stock held by Thalia Woods Management Inc. Each share of Series B Preferred Stock held by Thalia Woods Management, Inc. is entitled to 1,000 votes per share which voting right shall be non-dilutive for a period of one year from the date of issuance and is convertible at any time into shares of the Company’s common stock at a conversion price equal to $0.30 per share or an aggregate of 250,000 shares of the Company’s common stock.  Michael Brodsky has sole voting and dispositive power over the shares held by Thalia Woods Management, Inc.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

RODZ Holdings, Ltd. , an entity owned by Robert Zysblat and Owen Dukes, provided management services to the Company. Fees incurred for the eleven months ended December 31, 2013 and the year ended January 31, 2013 were $277,940 and $144,480, respectively..

Director Independence

Michael Brodsky is independent as term is defined under the Nasdaq Marketplace Rules.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

On October 28, 2013, the Company dismissed Kabani & Company, Inc. (“Kabani”), as its independent registered public accounting firm. The Company’s Board of Directors appointed Bedinger & Company (“Bedinger”) as its new independent registered public accounting firm, effective as of October 28, 2013.

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The aggregate fees billed to us by Kabani for professional services rendered during the years ended December 31, 2013 and 2012, respectively, in connection with their audits of our December 31, 2012 consolidated financial statements and reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-Q and other professional services as audit fees, audit-related fees, tax fees and all other fees are set forth in the table below:

Fee Category	Year ended December 31, 2013		Year ended December 31, 2012
Audit fees (1)	$	45,000	$	57,000
Audit-related fees (2)	$	-	$	-
Tax fees (3)	$	-	$	-
All other fees (4)	$	-	$	-
Total fees	$	45,000	$	57,000

(1) Audit fees consist of fees incurred for professional services rendered for the audits of financial statements, for reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided in connection with statutory or regulatory filings or engagements.

(2) Audit-related fees consist of fees billed for professional services that are reasonably related to the performance of the audit or review of our consolidated financial statements, but are not reported under “Audit fees.”

(3) Tax fees consist of fees billed for professional services relating to tax compliance, tax planning, and tax advice.

(4) All other fees consist of fees billed for all other services.

The aggregate fees billed to us by Bedinger for professional services rendered during the year ended December 31, 2013 in connection with their audits of our December 31, 2013 consolidated financial statements and reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-Q and other professional services as audit fees, audit-related fees, tax fees and all other fees are set forth in the table below:

Fee Category	Year ended December 31, 2013
Audit fees (1)	$	20,000
Audit-related fees (2)	$	-
Tax fees (3)	$	-
All other fees (4)	$	-
Total fees	$

The Board of Directors selects our independent public accountant, establishes procedures for monitoring and submitting information or complaints related to accounting, internal controls or auditing matters, engages outside advisors, and makes decisions related to funding the outside auditory and non-auditory advisors.

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ITEM 15. EXHIBITS

Exhibit Number	Description
2.1	Agreement and Plan of Merger and Reorganization (filed as exhibit to 8-K filed with the SEC on January 7, 2014 and incorporated herein by reference).
3.1	Certificate of Incorporation (filed as exhibit to Form 10-SB filed with the SEC on March 26, 2007 and incorporated herein by reference).
3.2	Certificate of Designation of Series A Convertible Preferred Stock (filed as exhibit to 8-K filed with the SEC on January 6, 2011 and incorporated herein by reference).
3.3	Certificate of Designation of Series B Convertible Preferred Stock (filed as exhibit to 8-K filed with the SEC on July 19, 2011 and incorporated herein by reference).
3.4	Certificate of Designation of Series C Convertible Preferred Stock (filed as exhibit 8-K filed with the SEC on January 7, 2014.
3.5	Certificate of Amendment to Certificate of Incorporation (filed as exhibit to 8-K filed with the SEC on July 19, 2011 and incorporated herein by reference).
3.6	By-laws (filed as exhibit to 10-SB filed  with the SEC on March 26, 2007 and incorporated herein by reference).
10.1	Employment Agreement, dated December 31, 2013 between the Company and Owen Dukes
10.2	Employment Agreement, dated December 31, 2013 between the Company and  Robert Zysblat
10.3	Securities Purchase Agreement, dated December 31, 2013, between the Company and the Investor named therein (incorporated by reference to 8-K filed on January 7, 2014).
10.4	8% Convertible Debenture, dated December 31, 2013 (incorporated by reference to 8-K filed on January 7, 2014).
10.5	10% Convertible Debenture, dated July 29, 2010 (incorporated by reference to 8-K filed on August 3, 2010).
10.6	8% Convertible Debenture, dated May 30, 2012 (incorporated by reference to 8-K filed on June 6, 2012).
10.7	10% Convertible Debenture, dated October 26, 2012 (incorporated by reference to 8-K filed on November 13, 2012).
10.8	8% Convertible Debenture, dated February 21, 2014
10.9	8% Convertible Debenture, dated March 21, 2014
10.10	8% Convertible Debenture, dated March 21, 2014
10.11	8% Convertible Debenture, dated March 26, 2014
10.12	Form of Securities Purchase Agreement, dated February 21, 2014, March 21, 2014 and March 26, 2014
16	Letter from Kabrani & Company, Inc. (filed as exhibit to 8-K filed with the SEC on November 4, 2013 and incorporated herein by reference).
21	Subsidiaries: Thinspace Technology Ltd. (United Kingdom corporation) Thinspace Technology, Ltd (Nevada corporation)
31.1	Certification of principal executive and financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of principal executive and financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EX-101.INS	XBRL INSTANCE DOCUMENT
EX-101.SCH	XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
EX-101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
EX-101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
EX-101.LAB	XBRL TAXONOMY EXTENSION LABELS LINKBASE
EX-101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THINSPACE TECHNOLOGY, INC.
Dated:  March 31, 2014	By:	/s/ Owen Dukes
		Name: Owen Dukes
		Title: Chief Executive Officer (principal executive officer)

Dated:  March 31, 2014	By:	/s/ Robert Zysblat
		Name: Robert Zysblat
		Title: President (principal executive and financial officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURE	TITLE	DATE
/s/ Owen Dukes	Chief Executive Officer, Director	March 31, 2014
Owen Dukes	(principal executive officer)
/s/ Robert Zysblat	President, Director	March 31, 2014
Robert Zysblat	(principal executive and financial officer)
/s/ Michael Brodsky	Director	March 31, 2014
Michael Brosky

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EX-10.8

Exhibit 10.8

NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

February 21, 2014 $150,000

VANITY EVENTS HOLDING, INC.

8% Convertible Debenture

Due February 20, 2017

FOR VALUE RECEIVED, Vanity Events Holding, Inc. a Delaware corporation (hereinafter called the “Borrower” or the “Company”), hereby promises to pay to IBC FUNDS LLC, a Nevada Corporation  (the “Holder”), or order, without demand, the sum of ONE HUNDRED FIFTYTHOUSAND Dollars ($150,000), with simple interest accruing at the rate described below, on February 20, 2017(the "Maturity Date")..

 NOW THEREFORE, the following terms shall apply to this Note:

ARTICLE I

GENERAL PROVISIONS

1.1           Payments. The entire unpaid principal amount due under this Note (the “Principal”) shall be due and payable on the Maturity Date. Interest on this Note (the “Interest”) will be payable annually. Interest shall be payable in cash or, at the Company’s option, in shares of the Company’s common stock, par value $0.001 per share (the "Common Stock").

           Upon any conversion in part by the Holder in accordance with Article II, the Holder and the Borrower shall in good faith recalculate the outstanding principal balance. Upon any full conversion by the Holder in accordance with Article II of all of the Interest and the Principal due hereunder, all of the Borrower's payment obligations shall terminate. All payments in respect of the indebtedness evidenced hereby shall be applied in the following order: to accrued Interest, Principal, and charges and expenses owing under or in connection with this Note.

           If any payment of interest is paid in Common Stock, the number of shares issuable will be determined utilizing the conversion ratio as set forth in Article II. Notwithstanding the foregoing, the Company’s right to pay this Note, including any Interest due thereunder, in shares of Common Stock upon the Maturity Date is subject to the condition that: (i) the Common Stock is trading on the OTC Markets (Pink Sheets), OTC Bulletin Board, American Stock Exchange or Nasdaq; and (ii) there is an effective Registration Statement on the Maturity Date or the shares are otherwise eligible for resale pursuant to Rule 144.

1.2           Interest.  Interest shall accrue on the outstanding principal balance hereof at an annual rate equal to eight percent (8%) from the date Principal was advanced in connection with this Note and shall be payable annually unless otherwise converted earlier at the election of the Holder as further described below.  Interest shall be calculated on the basis of a 360-day year and the actual number of days elapsed, to the extent permitted by applicable  law.  Interest hereunder will be paid to the Holder or its assignee in whose name this Note is registered on the records of the Borrower regarding registration and transfers of Notes  (the “Note Register”).  However, should the Company fail to maintain current public information as defined in Rule 144 of the Securities Act of 1933, the interest rate shall increase to 18% per annum for that period when the Company’s filings are not up-to-date and the failure to timely file shall constitute a default allowing for acceleration of the Note.

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1.3           Payment Grace Period. From and after the 10th day after an Event of Default under Section 3.1, the Interest Rate applicable to any unpaid amounts owed hereunder shall be increased to eighteen percent (18%) per annum.

1.4           Conversion Privileges. The conversion privileges set forth in Article II shall remain in full force and effect immediately from the date hereof and until the Note is paid in full regardless of the occurrence of an Event of Default. This Note shall be payable in full on the Maturity Date, unless previously converted into Common Stock in accordance with Article II hereof; provided, that if an Event of Default has occurred, the Holder may elect to extend the Maturity Date by the amount of days of the pendency of the Event of Default.

1.5           Corporate Existence.  So long as this Note remains outstanding, the Company shall not directly or indirectly consummate any merger, reorganization, restructuring, reverse stock split, consolidation, sale of all or substantially all of the Company's assets or any similar transaction or related transactions (each such transaction, a “Fundamental Change”) where the Company is not the surviving entity unless, prior to the consummation a Fundamental Change, the Company shall have given the Holder not less than fourteen (14) days prior written notice to the Holder.  In any such case, the Company grant the Holder the right to put this Note to the Company up to the time of the effectiveness of the Fundamental Change at 150% of the then outstanding Principal plus any unpaid and accrued Interest.

This Note is subject to the following additional provisions:

ARTICLE II

CONVERSION RIGHTS AND REDEMPTION RIGHTS

The Holder shall have the right to convert the principal and accrued and unpaid interest due under this Note into Shares of the Borrower's Common Stock as set forth below.

2.1           Conversion into the Borrower's Common Stock.

(a)           The Holder shall have the right from and after the date of the issuance of this Note and then at any time until this Note is fully paid, to convert any outstanding and unpaid principal portion of this Note, and accrued Interest, at the election of the Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully paid and non-assessable shares of Common Stock as such stock exists on the date of issuance of this Note (such shares, the “Conversion Shares”), or any shares of capital stock of Borrower into which such Common Stock shall hereafter be changed or reclassified (the “Other Securities”), at the conversion price as defined in Section 2.1(b) hereof (the "Conversion Price"), determined as provided herein. Upon delivery to the Borrower of a completed Notice of Conversion, a form of which is attached hereto as Exhibit A, Borrower shall issue and deliver to the Holder within three (3) business days from the Conversion Date (such third day being the “Delivery Date”) that number of Conversion Shares for the portion of the Note converted in accordance with the foregoing. At the election of the Holder, the Borrower will deliver accrued but unpaid interest on the principal amount of the Note being converted in the manner provided in Section 1.1 through the Conversion Date directly to the Holder on or before the Delivery Date. The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal of this Note and accrued interest to be converted, by the Conversion Price.

(b)Subject to adjustment as provided in Section 2.1(c) hereof, the Conversion Price per share shall be 25% of the lowest closing bid price as of 4 pm (New York Time) for the Company’s stock during the previous 20 trading days.

(c)            The Conversion Price and number and kind of shares or other securities to be issued upon conversion determined pursuant to Section 2.1(a), shall be subject to adjustment from time to time upon the happening of the following certain events while this conversion right remains outstanding:

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                                A.           Reorganization, Consolidation, Merger, etc.; Reclassification.  In case at any time or from time to time, the Company shall, subject to Section 1.5 hereof, effect a Fundamental Change, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Note, on the conversion hereof as provided in Article II, at any time after the consummation of such Fundamental Change, shall receive, in lieu of the Conversion Shares (or Other Securities) issuable on such conversion prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation of a Fundamental Change if such Holder had so converted this Note, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 2.1(c)(E).

                                           If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes that may be issued or outstanding, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

                                B.           Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of this Note after the effective date of such dissolution pursuant to this Article II to a bank or trust company (a “Trustee”) having its principal office in New York, NY, as trustee for the Holder of the Notes.

                                C.           Continuation of Terms. Upon any Fundamental Change or transfer (and any dissolution following any transfer) referred to in this Article II, this Note shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the conversion of this Note after the consummation of such Fundamental Change or transfer or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Note as provided in Section 2.1(c)(E). In the event this Note does not continue in full force and effect after the consummation of the transaction described in this Article II, then only in such event will the Company's securities and property (including cash, where applicable) receivable by the Holder of this Note be delivered to the Trustee as contemplated by Section 2.1(c)(B).

          D.           Share Issuance.  If at any time this Note is outstanding the Company shall offer, issue or agree to issue any common stock or securities convertible into or exercisable for shares of common stock (or modify any of the foregoing which may be outstanding) to any person or entity at a price per share or conversion or exercise price per share which shall be less than the then applicable Conversion Price in respect of the Shares, without the consent of the Holders of this Note, except with respect to Excepted Issuances, then the Company shall issue, for each such occasion, additional shares of Common Stock to each Holder so that the average per share purchase price of the shares of Common Stock issued to the Holder (of only the Conversion Shares still owned by the Holder) is equal to such other lower price per share and the Conversion Price shall automatically be reduced to such other lower price per share.  For the purposes hereof, "Excepted Issuances" means any offer, issuance or agreement to issue any common stock or securities convertible into or exercisable for shares of common stock (or modify any of the foregoing which may be outstanding) in connection with (i) full or partial consideration in connection with a strategic merger, consolidation or purchase of substantially all of the securities or assets of corporation or other entity, (ii) the Company’s issuance of securities in connection with strategic license agreements and other partnering arrangements so long as such issuances are not for the purpose of raising capital, (iii) the Company’s issuance of Common Stock or the issuance or grants of options to purchase Common Stock pursuant to the Company’s stock option plans and employee stock purchase plans, (iv) the conversion of any of the Notes, (v) the payment of any interest on the Notes, and (vi) as has been described in the Reports filed with the Commission or delivered to the Holder prior to the issuance of this Note (collectively, the “Excepted Issuances”).  The delivery to the Holder of the additional shares of Common Stock shall be not later than the closing date of the transaction giving rise to the requirement to issue additional shares of Common Stock.  For purposes of the issuance and adjustment described in this paragraph, the issuance of any security of the Company carrying the right to convert such security into shares of Common Stock or of any warrant, right or option to purchase Common Stock shall result in the issuance of the additional shares of Common Stock upon the issuance of such convertible security, warrant, right or option and again at any time upon any subsequent issuances of shares of Common Stock upon exercise of such conversion or purchase rights if such issuance is at a price lower than the Conversion Price in effect upon such issuance.  The rights of the Holder set forth in this Section 2.1 (c)(D), are in addition to any other rights the Holder has pursuant to this Note, any Transaction Document and any other agreement referred to or entered into in connection herewith.

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                                E.           Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) subject to Section 1.5 hereof, combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the Conversion Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Conversion Price then in effect. The Conversion Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 2.1(c)(E). The number of Conversion Shares that the Holder of this Note shall thereafter, on the conversion hereof as provided in Article II, be entitled to receive shall be adjusted to a number determined by multiplying the number of Conversion Shares that would otherwise (but for the provisions of this Section 2.1(c)(E)) be issuable on such conversion by a fraction of which (a) the numerator is the Conversion Price that would otherwise (but for the provisions of this Section 2.1(c)(E)) be in effect, and (b) the denominator is the Conversion Price in effect on the date of such conversion.

                                F.           Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the conversion of the Notes, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Note and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Conversion Price and the number of Conversion Shares to be received upon conversion of this Note, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Note. The Company will forthwith mail a copy of each such certificate to the Holder of the Note and any transfer agent of the Company.

 G.           Delay in Clearing. The Company shall issue shares to the Holder as set forth in 2.1(b) (“Initial Conversion Price”). However if the conversion price for the common stock on the Clearing Date (defined below) is lower than the Initial Conversion Price, then the Initial Conversion Price shall be adjusted such that the Discount shall be taken based on the Clearing Date, and the Company shall issue additional shares to Purchaser to reflect such adjusted Conversion Price, with such additional issuance being subject to the limitation on conversion as set forth in 2.11, below.  For purposes of this Agreement, the Clearing Date shall be on the date in which the conversion shares are deposited into the Purchaser’s brokerage account and Purchaser’s broker has confirmed with Purchaser that the Purchaser may execute trades of the conversion shares. The Holder shall represent and warrant that the shares were promptly tendered to the Holder’s broker and that the delay is not the result of the Holder failing to provide the Broker or Clearing Firm with appropriate documentation to clear such shares including but not limited to this Note.

2.2           Method of Conversion. This Note may be converted by the Holder in whole or in part as described in Section 2.1(a) hereof and the Subscription Agreement. Upon partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid.

2.3           Issuance Below Par.  The Parties hereto agree that Delaware Law allows for the issuance of conversion shares under this section even if such conversion price is less than the shares’ stated par value, and that such shares shall be issued in response to a Conversion Request regardless of Conversion Price.

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2.4           Intentionally Left Blank.

2.5           Conversion of Note.

(a)           Upon the conversion of this Note or part thereof, the Company shall, at its own cost and expense, take all necessary action, including obtaining and delivering, an opinion of counsel to assure that the Company's transfer agent shall issue stock certificates in the name of Holder (or its nominee) or such other persons as designated by Holder and in such denominations to be specified at conversion representing the number of Conversion Shares issuable upon such conversion. The Company warrants that no instructions other than these instructions have been or will be given to the transfer agent of the Company's Common Stock and that, unless waived by the Holder, the Conversion Shares will be free-trading, and freely transferable, and will not contain a legend restricting the resale or transferability of the Conversion Shares provided the Conversion Shares are being sold pursuant to an effective registration statement covering the Conversion Shares or are otherwise exempt from registration.

(b)           Subscriber will give notice of its decision to exercise its right to convert this Note or part thereof by telecopying an executed and completed Notice of Conversion (a form of which is attached as Exhibit A to the Note) to the Company via confirmed telecopier transmission, email, or overnight courier or otherwise pursuant to Section 4.2 of this Note. The Subscriber will not be required to surrender this Note until this Note has been fully converted or satisfied, with each date on which a Notice of Conversion is telecopied to the Company in accordance with the provisions hereof shall be deemed a Conversion Date (as defined above). The Company will itself or cause the Company’s transfer agent to transmit the Company's Common Stock certificates representing the Conversion Shares issuable upon conversion of this Note to the Subscriber via express courier for receipt by such Subscriber on or before the Delivery Date (as defined above). In the event the Conversion Shares are electronically transferable, then delivery of the Conversion Shares must be made by electronic transfer provided request for such electronic transfer has been made by the Subscriber and the Subscriber has complied with all applicable securities laws in connection with the sale of the Common Stock, including, without limitation, the prospectus delivery requirements.  A Note representing the balance of this Note not so converted will be provided by the Company to the Subscriber if requested by Subscriber, provided the Subscriber delivers the original Note to the Company.

(c)           The Company understands and agrees that a delay in the delivery of the Conversion Shares in the form required pursuant to Section 2.5(a) hereof, after the Delivery Date (as hereinafter defined) could result in economic loss to the Holder. As compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of Conversion Shares upon Conversion of the Note in the amount of $500 per business day after the Delivery Date for each $10,000 of Note principal amount being converted of the corresponding Conversion Shares which are not timely delivered. The Company shall pay any payments incurred under this Section in immediately available funds upon demand. Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Conversion Shares by the Delivery Date the Holder will be entitled to revoke all or part of the relevant Notice of Conversion  by delivery of a notice to such effect to the Company whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the delivery of such notice, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

(d)           Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

2.6           Injunction Posting of Bond. In the event a Holder shall elect to convert a Note or part thereof in whole or in part, the Company may not refuse conversion based on any claim that such Holder or any one associated or affiliated with such Holder has been engaged in any violation of law, or for any other reason, unless an injunction from a court, on notice, restraining and or enjoining conversion of all or part of such Note shall have been sought and obtained by the Company and the Company has posted a surety bond for the benefit of such Holder in the amount of 120% of the amount of the Note, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent Holder obtains judgment.

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2.7           Optional Redemption.

(a)           Provided that the Company has a number of authorized but unissued shares of Common Stock sufficient for the issuance of all Conversion Shares underlying the remaining principal amount of this Note, such Common Stock is listed or quoted (and is not suspended from trading) on the Principal Market and such shares of Common Stock are approved for listing on such Principal Market upon issuance if applicable, such Common Stock is registered for resale under the Registration Statement and the prospectus under such Registration Statement is available for the sale of all Registrable Securities held by the Subscriber or there is an applicable exemption from registration, such issuance would be permitted in full without violating Section 2.3 herein or the rules or regulations of any trading market on which such Common Stock may be listed or quoted, and both immediately before and after giving effect thereto, no Event of Default under the Subscription Agreement or this Note shall or would exist, the Borrower will have the option of prepaying the outstanding principal amount of this Note ("Optional Redemption"), in whole or in part, together with interest accrued thereon, by paying to the Holder a sum of money equal to one hundred fifty percent (150%) of the principal amount to be redeemed, together with accrued but unpaid interest thereon and interest that will accrue until the actual repayment date and any and all other sums due, accrued or payable to the Holder arising under the Note, the Subscription Agreement or any Transaction Document (the "Redemption Amount") on the day written notice of redemption (the "Notice of Redemption") is given to the Holder. The Notice of Redemption shall specify the date for such Optional Redemption (the "Redemption Payment Date"), which date shall be not less than five (5) business days after the date of the Notice of Redemption (the "Redemption Period"). A Notice of Redemption shall not be effective with respect to any portion of this Note for which the Holder has a pending election to convert, or for Conversion Notices given by the Holder prior to the Redemption Payment Date. On the Redemption Payment Date, the Redemption Amount shall be paid in good funds to the Holder. In the event the Borrower fails to pay the Redemption Amount on the Redemption Payment Date as set forth herein, then (i) such Notice of Redemption will be null and void, (ii) Borrower will have no further right to deliver another Notice of Redemption, and (iii) Borrower’s failure may be deemed by Holder to be a non-curable Event of Default. The funds for such redemption may not come from a third party financing or other financing provided by the holder and may not result in the subsequent assignment of this debt.

           2.8           Mandatory Redemption at Subscriber’s Election.  In the event the Company is prohibited from issuing Conversion Shares, or fails to timely deliver Shares on a Delivery Date, or upon the occurrence of any other Event of Default (as defined in this Note or in the Subscription Agreement) or for any reason other than pursuant to the limitations set forth in Section 2.3 hereof, then at the Subscriber's election, the Company must pay to the Subscriber ten (10) business days after request by the Subscriber, at the Subscriber's election, a sum of money in immediately available terms equal to the greater of (i) the product of the outstanding principal amount of the Note designated by the Subscriber multiplied by 150%, or (ii) the product of the number of Conversion Shares otherwise deliverable upon conversion of an amount of Note principal and/or interest designated by the Subscriber (with the date of giving of such designation being a “Deemed Conversion Date”) at the then Conversion Price that would be in effect on the Deemed Conversion Date multiplied by the average of the closing bid prices for the Common Stock for the five consecutive trading days preceding either: (1) the date the Company becomes obligated to pay the Mandatory Redemption Payment, or (2) the date on which the Mandatory Redemption Payment is made in full, whichever is greater, together with accrued but unpaid interest thereon and any liquidated damages then payable (“Mandatory Redemption Payment”).  The Mandatory Redemption Payment must be received by the Subscriber on the same date as the Company Shares otherwise deliverable or within ten (10) business days after request, whichever is sooner (“Mandatory Redemption Payment Date”).  Upon receipt of the Mandatory Redemption Payment, the corresponding Note principal and interest will be deemed paid and no longer outstanding. Liquidated damages calculated pursuant to Section 2.5(c) hereof, that have been paid or accrued for the twenty (20) day period prior to the actual receipt of the Mandatory Redemption Payment by the Subscriber shall be credited against the Mandatory Redemption Payment.

           2.9           Buy-In.  In addition to any other rights available to the Subscriber, but without any duplicative recovery by the Subscriber, if the Company fails to deliver to the Subscriber the Conversion Shares issuable upon conversion of this Note by the Delivery Date and if after five (5) business days after the Delivery Date the Subscriber purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Subscriber of the Common Stock which the Subscriber was entitled to receive upon such conversion (a “Buy-In”), then the Company shall pay in cash to the Subscriber (in addition to any remedies available to or elected by the Subscriber) the amount by which (A) the Subscriber's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate principal and/or interest amount of the Note for which such conversion was not timely honored, together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty).  For example, if the Subscriber purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of $10,000 of note principal and/or interest, the Company shall be required to pay the Subscriber $1,000, plus interest.  The Subscriber shall provide the Company written notice indicating the amounts payable to the Subscriber in respect of the Buy-In.

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2.10           Reservation. During the period the conversion right exists, Borrower will reserve and instruct its Transfer Agent to reserve from its authorized and unissued Common Stock a number of shares of Common Stock equal to 150% of the amount of Common Stock issuable upon the full conversion of this Note. Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

2.11           Maximum Conversion

(a) Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon conversion of this Note (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934 Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. By written notice to the Company, a Subscriber may waive the provisions of this Section 2.3(a) as to itself but any such waiver will not be effective until the 61st day after delivery thereof and such waiver shall have no effect on any other Subscriber.

(b)           Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon conversion of this Note (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934 Act, does not exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. This provision may not be waived.

2.12           Short sales.  The Holder shall not sell short the common shares of the Company without first having sent a conversion request to the Company or having such shares available to cover such short sale prior to entering into such short sale.

ARTICLE III

EVENTS OF DEFAULT

An “Event of  Default,”  wherever  used  herein, means any one of the following events  (whatever  the reason and whether it shall be voluntary  or involuntary or effected by operation of law or pursuant to any judgment,  decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

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3.1           Failure to Pay Principal or Interest. The Borrower fails to pay any installment of Principal, Interest or other sum due under this Note when due and payable.

3.2           Breach of Covenant. The Borrower breaches any other covenant or other term or condition of the Subscription Agreement or this Note in any material respect and such breach, if subject to cure, continues for a period of ten (10) business days after written notice to the Borrower from the Holder.

3.3           Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein, in the Subscription Agreement, or in any agreement, statement or certificate given in writing pursuant hereto or in connection therewith shall be false or misleading in any material respect as of the date made and the Closing Date.

3.4           Receiver or Trustee. The Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed.

3.5           Judgments. Any money judgment, writ or similar final process shall be entered or filed against Borrower or any of its property or other assets for more than $1,000,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days.

3.6           Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted by or against the Borrower and if instituted against Borrower are not dismissed within thirty (60) days of initiation.

3.7           Non-Payment.  A default by the Borrower under any one or more obligations in an aggregate monetary amount in excess of $200,000 for more than forty-five (45) days after the due date. Any obligations in default prior to December 15th, 2013 are not an “Event of Default” under this agreement.

3.8           Stop Trade. An SEC or judicial stop trade order or Principal Market trading suspension that lasts for five or more consecutive trading days.

3.9           Failure to Deliver Common Stock or Replacement Note. Borrower's failure to timely deliver Common Stock to the Holder pursuant to and in the time required by this Note.

                3.10          Failure to Maintain Current Public Information. The Company’s failure to maintain current public information as defined in Rule 144 of the Securities Act of 1933 or failure to timely file its reports as required by Securities Exchange Act of 1934.

3.11           Reverse Splits.  The Borrower effectuates a reverse split of its Common Stock without the prior written consent of of the Holder.

3.12           Reservation Default.  Failure by the Borrower to have reserve for issuance upon conversion of the Note the amount of Common stock as set forth in the Subscription Agreement.

3.13           Cross Default. A default by the Borrower of a material term, covenant, warranty or undertaking of any other agreement to which the Borrower and Holder are parties.

3.14           Change in Control. A change in control of the Company without at least fourteen (14) days prior written notice to Holder. A change in control shall mean that more than 30% of the shares of common stock are consolidated in one person or entity so that the person or entity(other than any one or more of the Holders) may control the election of the board of directors or the passage of a proposal that would normally require a shareholder vote without such shareholder vote and that such person or entity was not a holder of shares of the Company at the date of execution hereof.

3.15           Asset Sales.  Any instance, undertaken without written consent  of the Holder, whereby the Company or any of its subsidiaries, sells, transfers, leases or otherwise disposes (including pursuant to a merger) of substantially all of the Company’s assets, including any asset constituting an equity interest in any other person, except sales, transfers, leases and other dispositions of inventory, used, obsolete or surplus equipment or other property, in each case in the ordinary course of the Company’s business and consistent with past practice.

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3.16     Delisting.  Delisting of the Common Stock from the  Principal Market, including the OTC Markets’ QB tier, Pink Sheets or the Over-the-Counter Bulletin Board, on which the Common Stock is then listed or quoted for trading.

During the time that any portion of this Note is outstanding,  if any Event of Default has occurred,  the remaining principal amount of this Note, together with interest and other amounts owing in respect   hereof,  to the date of  acceleration  shall become, at the  Holder's  election,  immediately  due and payable in cash,  provided  however,  the Holder may request  (but shall have no obligation  to request)  payment of such amounts in Common Stock of the Borrower. In addition to any other remedies,  the Holder shall have the right (but not the obligation)  to convert this Note at any time after (x) an Event of Default or (y) the Maturity Date at the Conversion Price then ineffect. The Holder must provide written notice notifying the Holder when an Event of Default occurs or at the Maturity Date of the Note.. Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder. No such rescission or annulment  shall affect any subsequent  Event of Default or impair any right  consequent  thereon.  Upon an Event of Default,  notwithstanding  any other provision of this Note or any Transaction Document,  the Holder shall have no obligation to comply with or adhere to any  limitations,  if any, on the conversion of this Note or the sale of the Conversion Shares, Shares or Other Securities.

ARTICLE IV

MISCELLANEOUS

4.1           Failure or Indulgence Not Waiver. No failure or delay on the part of Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

                 4.2           Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Borrower to: Vanity Events Holdings, Inc. 12555 Orange Drive, Suite 216, Davie Florida 33330, telecopier number: 954-756-8043 and (ii) if to the Holder, to IBC Funds, LLC, 5348 Vegas Drive Suite 333, Las Vegas, NV 89108

4.3           Amendment Provision. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4           Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns.

4.5           Cost of Collection. If default is made in the payment of this Note, Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys' fees.

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4.6           Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Delaware. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located in the state of Florida located in Broward County, Florida. Both parties and the individual signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.

4.7           Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

4.8           Waiver of Jury Trial.  THE PARTIES HEREBY  KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY WAIVE  THE  RIGHT  ANY OF THEM  MAY HAVE TO A TRIAL  BY JURY IN  RESPECT  OF ANY LITIGATION  BASED  HEREON OR ARISING OUT OF,  UNDER OR IN  CONNECTION  WITH THIS AGREEMENT  OR ANY  TRANSACTION  DOCUMENT  OR ANY  COURSE OF  CONDUCT,  COURSE OF DEALING,  STATEMENTS  (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  THIS PROVISION  IS  A  MATERIAL  INDUCEMENT  FOR  THE  PARTIES'  ACCEPTANCE  OF  THIS AGREEMENT.

4.9           Redemption. This Note may not be redeemed or paid without the consent of the Holder except as described in this Note or in the Subscription Agreement.

4.10          Shareholder Status. The Holder shall not have rights as a shareholder of the Borrower with respect to unconverted portions of this Note. However, the Holder will have all the rights of a shareholder of the Borrower with respect to the shares of Common Stock to be received by Holder after delivery by the Holder of a Conversion Notice to the Borrower.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOLLOWS]

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        IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the 21st day of February, 2014.

VANITY EVENTS HOLDINGS, INC.
By:	/s/ Robert Zysblat
	Name: Robert Zysblat
	Title: President

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Exhibit A

NOTICE OF CONVERSION

(To be executed by the Holder in order to Convert the Note originally issued February 21, 2014)

TO:

The undersigned hereby irrevocably elects to convert $_________________ of the  principal  amount of the above  Note  into  Shares of Common  Stock of ________________________.,  according to the conditions  stated therein,  as of the Conversion Date written below.

Conversion Date:
Applicable Conversion Price:
Signature:
Name:
Amount to be converted:	$
Aunt of Note unconverted:	$
Conversion Price per share:	$
Number of shares to be issued:
Amount of Interest Converted:	$
Conversion Price per share:	$
Number of Interest shares of to be issued:
Total Number of shares of to be issued:
Issue to:
Broker DTC Participant Code:
Account Number:

If to be issued in Certificate form, send to:

____________________________________

____________________________________

____________________________________

____________________________________

EX-10.9

Exhibit 10.9

NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

March 21 , 2014 $50,000

THINSPACE TECHNOLOGY, INC.

8% Convertible Note

Due March 21, 2017

FOR VALUE RECEIVED, Thinspace Technology, Inc. a Delaware corporation (hereinafter called the “Borrower” or the “Company”), hereby promises to pay to IBC FUNDS LLC, a Nevada Corporation  (the “Holder”), or order, without demand, the sum of FIFTY THOUSAND Dollars ($50,000), with simple interest accruing at the rate described below, on March 21, 2017(the "Maturity Date").

 NOW THEREFORE, the following terms shall apply to this Note:

ARTICLE I

GENERAL PROVISIONS

1.1           Payments. The entire unpaid principal amount due under this Note (the “Principal”) shall be due and payable on the Maturity Date. Interest on this Note (the “Interest”) will be payable annually. Interest shall be payable in cash or, at the Company’s option, in shares of the Company’s common stock, par value $0.001 per share (the "Common Stock").

           Upon any conversion in part by the Holder in accordance with Article II, the Holder and the Borrower shall in good faith recalculate the outstanding principal balance. Upon any full conversion by the Holder in accordance with Article II of all of the Interest and the Principal due hereunder, all of the Borrower's payment obligations shall terminate. All payments in respect of the indebtedness evidenced hereby shall be applied in the following order: to accrued Interest, Principal, and charges and expenses owing under or in connection with this Note.

           If any payment of interest is paid in Common Stock, the number of shares issuable will be determined utilizing the conversion ratio as set forth in Article II. Notwithstanding the foregoing, the Company’s right to pay this Note, including any Interest due thereunder, in shares of Common Stock upon the Maturity Date is subject to the condition that: (i) the Common Stock is trading on the OTC Markets, OTC Bulletin Board, New York Stock Exchange, NYSE MKT or Nasdaq; and (ii) there is an effective Registration Statement on the Maturity Date or the shares are otherwise eligible for resale pursuant to Rule 144.

1.2           Interest.  Interest shall accrue on the outstanding principal balance hereof at an annual rate equal to eight percent (8%) from the date Principal was advanced in connection with this Note and shall be payable annually unless otherwise converted earlier at the election of the Holder as further described below.  Interest shall be calculated on the basis of a 360-day year and the actual number of days elapsed, to the extent permitted by applicable  law.  Interest hereunder will be paid to the Holder or its assignee in whose name this Note is registered on the records of the Borrower regarding registration and transfers of Notes  (the “Note Register”).  However, should the Company fail to maintain current public information as defined in Rule 144 of the Securities Act of 1933, the interest rate shall increase to 18% per annum for that period when the Company’s filings are not up-to-date and the failure to timely file shall constitute a default allowing for acceleration of the Note.

1.3           Payment Grace Period. From and after the 10th day after an Event of Default under Section 3.1, the Interest Rate applicable to any unpaid amounts owed hereunder shall be increased to eighteen percent (18%) per annum.

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1.4           Conversion Privileges. The conversion privileges set forth in Article II shall remain in full force and effect immediately from the date hereof and until the Note is paid in full regardless of the occurrence of an Event of Default. This Note shall be payable in full on the Maturity Date, unless previously converted into Common Stock in accordance with Article II hereof; provided, that if an Event of Default has occurred, the Holder may elect to extend the Maturity Date by the amount of days of the pendency of the Event of Default.

1.5           Corporate Existence.  So long as this Note remains outstanding, the Company shall not directly or indirectly consummate any merger, reorganization, restructuring, reverse stock split, consolidation, sale of all or substantially all of the Company's assets or any similar transaction or related transactions (each such transaction, a “Fundamental Change”) where the Company is not the surviving entity unless, prior to the consummation a Fundamental Change, the Company shall have given the Holder not less than fourteen (14) days prior written notice to the Holder.  In any such case, the Holder will have the right to put this Note to the Company up to the time of the effectiveness of the Fundamental Change at 150% of the then outstanding Principal plus any unpaid and accrued Interest.

1.6           Use of Proceeds. The proceeds from this Note will be substantially employed by the Company for the purposes set forth on Exhibit B. Without limiting the generality of the foregoing, the Company may not use any proceeds from this Note for payment of salary to Mr. Owen Dukes or Mr. Robert Zysblat.

This Note is subject to the following additional provisions:

ARTICLE II

CONVERSION RIGHTS AND REDEMPTION RIGHTS

The Holder shall have the right to convert the principal and accrued and unpaid interest due under this Note into Shares of the Borrower's Common Stock as set forth below.

2.1           Conversion into the Borrower's Common Stock.

(a)           The Holder shall have the right from and after the date of the issuance of this Note and then at any time until this Note is fully paid, to convert any outstanding and unpaid principal portion of this Note, and accrued Interest, at the election of the Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully paid and non-assessable shares of Common Stock as such stock exists on the date of issuance of this Note (such shares, the “Conversion Shares”), or any shares of capital stock of Borrower into which such Common Stock shall hereafter be changed or reclassified (the “Other Securities”), at the conversion price as defined in Section 2.1(b) hereof (the "Conversion Price"), determined as provided herein. Upon delivery to the Borrower of a completed Notice of Conversion, a form of which is attached hereto as Exhibit A, Borrower shall issue and deliver to the Holder within three (3) business days from the Conversion Date (such third day being the “Delivery Date”) that number of Conversion Shares for the portion of the Note converted in accordance with the foregoing. At the election of the Holder, the Borrower will deliver accrued but unpaid interest on the principal amount of the Note being converted in the manner provided in Section 1.1 through the Conversion Date directly to the Holder on or before the Delivery Date. The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal of this Note and accrued interest to be converted, by the Conversion Price.

(b)Subject to adjustment as provided in Section 2.1(c) hereof, the Conversion Price per share shall be 25% of the lowest closing bid price as of 4 pm (New York Time) for the Company’s stock during the previous 20 trading days.

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(c)            The Conversion Price and number and kind of shares or other securities to be issued upon conversion determined pursuant to Section 2.1(a), shall be subject to adjustment from time to time upon the happening of the following certain events while this conversion right remains outstanding:

                                A.           Reorganization, Consolidation, Merger, etc.; Reclassification.  In case at any time or from time to time, the Company shall, subject to Section 1.5 hereof, effect a Fundamental Change, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Note, on the conversion hereof as provided in Article II, at any time after the consummation of such Fundamental Change, shall receive, in lieu of the Conversion Shares (or Other Securities) issuable on such conversion prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation of a Fundamental Change if such Holder had so converted this Note, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 2.1(c)(E).

                                           If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes that may be issued or outstanding, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

                                B.           Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of this Note after the effective date of such dissolution pursuant to this Article II to a bank or trust company (a “Trustee”) having its principal office in New York, NY, as trustee for the Holder of the Notes.

                                C.           Continuation of Terms. Upon any Fundamental Change or transfer (and any dissolution following any transfer) referred to in this Article II, this Note shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the conversion of this Note after the consummation of such Fundamental Change or transfer or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Note as provided in Section 2.1(c)(E). In the event this Note does not continue in full force and effect after the consummation of the transaction described in this Article II, then only in such event will the Company's securities and property (including cash, where applicable) receivable by the Holder of this Note be delivered to the Trustee as contemplated by Section 2.1(c)(B).

D.           Share Issuance.  If at any time this Note is outstanding the Company shall offer, issue or agree to issue any common stock or securities convertible into or exercisable for shares of common stock (or modify any of the foregoing which may be outstanding) to any person or entity at a price per share or conversion or exercise price per share which shall be less than the then applicable Conversion Price in respect of the Shares, without the consent of the Holders of this Note, except with respect to Excepted Issuances, then the Company shall issue, for each such occasion, additional shares of Common Stock to each Holder so that the average per share purchase price of the shares of Common Stock issued to the Holder (of only the Conversion Shares still owned by the Holder) is equal to such other lower price per share and the Conversion Price shall automatically be reduced to such other lower price per share.  For the purposes hereof, "Excepted Issuances" means any offer, issuance or agreement to issue any common stock or securities convertible into or exercisable for shares of common stock (or modify any of the foregoing which may be outstanding) in connection with (i) full or partial consideration in connection with a strategic merger, consolidation or purchase of substantially all of the securities or assets of corporation or other entity, (ii) the Company’s issuance of securities in connection with strategic license agreements and other partnering arrangements so long as such issuances are not for the purpose of raising capital, (iii) the Company’s issuance of Common Stock or the issuance or grants of options to purchase Common Stock pursuant to the Company’s stock option plans and employee stock purchase plans, (iv) the conversion of any of the Notes, (v) the payment of any interest on the Notes, and (vi) as has been described in the Reports filed with the Commission or delivered to the Holder prior to the issuance of this Note (collectively, the “Excepted Issuances”).  The delivery to the Holder of the additional shares of Common Stock shall be not later than the closing date of the transaction giving rise to the requirement to issue additional shares of Common Stock.  For purposes of the issuance and adjustment described in this paragraph, the issuance of any security of the Company carrying the right to convert such security into shares of Common Stock or of any warrant, right or option to purchase Common Stock shall result in the issuance of the additional shares of Common Stock upon the issuance of such convertible security, warrant, right or option and again at any time upon any subsequent issuances of shares of Common Stock upon exercise of such conversion or purchase rights if such issuance is at a price lower than the Conversion Price in effect upon such issuance.  The rights of the Holder set forth in this Section 2.1 (c)(D), are in addition to any other rights the Holder has pursuant to this Note, any Transaction Document and any other agreement referred to or entered into in connection herewith.

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                                E.           Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) subject to Section 1.5 hereof, combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the Conversion Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Conversion Price then in effect. The Conversion Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 2.1(c)(E). The number of Conversion Shares that the Holder of this Note shall thereafter, on the conversion hereof as provided in Article II, be entitled to receive shall be adjusted to a number determined by multiplying the number of Conversion Shares that would otherwise (but for the provisions of this Section 2.1(c)(E)) be issuable on such conversion by a fraction of which (a) the numerator is the Conversion Price that would otherwise (but for the provisions of this Section 2.1(c)(E)) be in effect, and (b) the denominator is the Conversion Price in effect on the date of such conversion.

                                F.           Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the conversion of the Notes, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Note and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Conversion Price and the number of Conversion Shares to be received upon conversion of this Note, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Note. The Company will forthwith mail a copy of each such certificate to the Holder of the Note and any transfer agent of the Company.

 G.           Delay in Clearing. The Company shall issue shares to the Holder as set forth in 2.1(b) (“Initial Conversion Price”). However if the conversion price for the common stock on the Clearing Date (defined below) is lower than the Initial Conversion Price, then the Initial Conversion Price shall be adjusted such that the Discount shall be taken based on the Clearing Date, and the Company shall issue additional shares to Purchaser to reflect such adjusted Conversion Price, with such additional issuance being subject to the limitation on conversion as set forth in 2.11, below.  For purposes of this Agreement, the Clearing Date shall be on the date in which the conversion shares are deposited into the Purchaser’s brokerage account and Purchaser’s broker has confirmed with Purchaser that the Purchaser may execute trades of the conversion shares. The Holder shall represent and warrant that the shares were promptly tendered to the Holder’s broker and that the delay is not the result of the Holder failing to provide the Broker or Clearing Firm with appropriate documentation to clear such shares including but not limited to this Note.

2.2           Method of Conversion. This Note may be converted by the Holder in whole or in part as described in Section 2.1(a) hereof and the Securities Purchase Agreement, dated on or about the date hereof, between the Company and the Holder (the “Purchase Agreement”). Upon partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid.

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2.3           Issuance Below Par.  The Parties hereto agree that Delaware Law allows for the issuance of conversion shares under this section even if such conversion price is less than the shares’ stated par value, and that such shares shall be issued in response to a Conversion Request regardless of Conversion Price.

2.4           Intentionally Left Blank.

2.5           Conversion of Note.

(a)           Upon the conversion of this Note or part thereof, the Company shall, at its own cost and expense, take all necessary action, including obtaining and delivering, an opinion of counsel to assure that the Company's transfer agent shall issue stock certificates in the name of Holder (or its nominee) or such other persons as designated by Holder and in such denominations to be specified at conversion representing the number of Conversion Shares issuable upon such conversion. The Company warrants that no instructions other than these instructions have been or will be given to the transfer agent of the Company's Common Stock and that, unless waived by the Holder, the Conversion Shares will be free-trading, and freely transferable, and will not contain a legend restricting the resale or transferability of the Conversion Shares provided the Conversion Shares are being sold pursuant to an effective registration statement covering the Conversion Shares or are otherwise exempt from registration.

(b)           Holder will give notice of its decision to exercise its right to convert this Note or part thereof by telecopying an executed and completed Notice of Conversion (a form of which is attached as Exhibit A to the Note) to the Company via confirmed telecopier transmission, email, or overnight courier or otherwise pursuant to Section 4.2 of this Note. The Holder will not be required to surrender this Note until this Note has been fully converted or satisfied, with each date on which a Notice of Conversion is telecopied to the Company in accordance with the provisions hereof shall be deemed a Conversion Date (as defined above). The Company will itself or cause the Company’s transfer agent to transmit the Company's Common Stock certificates representing the Conversion Shares issuable upon conversion of this Note to the Holder via express courier for receipt by such Holder on or before the Delivery Date (as defined above). In the event the Conversion Shares are electronically transferable, then delivery of the Conversion Shares must be made by electronic transfer provided request for such electronic transfer has been made by the Holder and the Holder has complied with all applicable securities laws in connection with the sale of the Common Stock, including, without limitation, the prospectus delivery requirements.  A Note representing the balance of this Note not so converted will be provided by the Company to the Holder if requested by Holder, provided the Holder delivers the original Note to the Company.

(c)           The Company understands and agrees that a delay in the delivery of the Conversion Shares in the form required pursuant to Section 2.5(a) hereof, after the Delivery Date (as hereinafter defined) could result in economic loss to the Holder. As compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of Conversion Shares upon Conversion of the Note in the amount of $500 per business day after the Delivery Date for each $10,000 of Note principal amount being converted of the corresponding Conversion Shares which are not timely delivered. The Company shall pay any payments incurred under this Section in immediately available funds upon demand. Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Conversion Shares by the Delivery Date the Holder will be entitled to revoke all or part of the relevant Notice of Conversion  by delivery of a notice to such effect to the Company whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the delivery of such notice, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

(d)           Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

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2.6           Injunction Posting of Bond. In the event a Holder shall elect to convert a Note or part thereof in whole or in part, the Company may not refuse conversion based on any claim that such Holder or any one associated or affiliated with such Holder has been engaged in any violation of law, or for any other reason, unless an injunction from a court, on notice, restraining and or enjoining conversion of all or part of such Note shall have been sought and obtained by the Company and the Company has posted a surety bond for the benefit of such Holder in the amount of 120% of the amount of the Note, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent Holder obtains judgment.

2.7           Optional Redemption.

(a)           Provided that no Event of Default under the Subscription Agreement or this Note exists, the Borrower will have the option of prepaying the outstanding principal amount of this Note ("Optional Redemption"), in whole or in part, together with interest accrued thereon, by paying to the Holder a sum of money equal to one hundred fifty percent (150%) of the principal amount to be redeemed, together with accrued but unpaid interest thereon and interest that will accrue until the actual repayment date and any and all other sums due, accrued or payable to the Holder arising under this Note, the Purchase Agreement or any Transaction Document (as defined in the Purchase Agreement) (the "Redemption Amount") on the day written notice of redemption (the "Notice of Redemption") is given to the Holder. The Notice of Redemption shall specify the date for such Optional Redemption (the "Redemption Payment Date"), which date shall be not less than five (5) business days after the date of the Notice of Redemption (the "Redemption Period"). A Notice of Redemption shall not be effective with respect to any portion of this Note for which the Holder has a pending election to convert, or for Conversion Notices given by the Holder prior to the Redemption Payment Date. On the Redemption Payment Date, the Redemption Amount shall be paid in good funds to the Holder. In the event the Borrower fails to pay the Redemption Amount on the Redemption Payment Date as set forth herein, then (i) such Notice of Redemption will be null and void, (ii) Borrower will have no further right to deliver another Notice of Redemption, and (iii) Borrower’s failure may be deemed by Holder to be a non-curable Event of Default. The funds for such redemption may not come from a third party financing or other financing provided by the holder and may not result in the subsequent assignment of this debt.

           2.8           Mandatory Redemption at Holder’s Election.  In the event the Company is prohibited from issuing Conversion Shares, or fails to timely deliver Shares on a Delivery Date, or upon the occurrence of any other Event of Default (as defined in this Note or in the Purchase Agreement) or for any reason other than pursuant to the limitations set forth in Section 2.3 hereof, then at the Holder's election, the Company must pay to the Holder ten (10) business days after request by the Holder, at the Holder's election, a sum of money in immediately available terms equal to the greater of (i) the product of the outstanding principal amount of the Note designated by the Holder multiplied by 150%, or (ii) the product of the number of Conversion Shares otherwise deliverable upon conversion of an amount of Note principal and/or interest designated by the Holder (with the date of giving of such designation being a “Deemed Conversion Date”) at the then Conversion Price that would be in effect on the Deemed Conversion Date multiplied by the average of the closing bid prices for the Common Stock for the five consecutive trading days preceding either: (1) the date the Company becomes obligated to pay the Mandatory Redemption Payment, or (2) the date on which the Mandatory Redemption Payment is made in full, whichever is greater, together with accrued but unpaid interest thereon and any liquidated damages then payable (“Mandatory Redemption Payment”).  The Mandatory Redemption Payment must be received by the Holder on the same date as the Company Shares otherwise deliverable or within ten (10) business days after request, whichever is sooner (“Mandatory Redemption Payment Date”).  Upon receipt of the Mandatory Redemption Payment, the corresponding Note principal and interest will be deemed paid and no longer outstanding. Liquidated damages calculated pursuant to Section 2.5(c) hereof, that have been paid or accrued for the twenty (20) day period prior to the actual receipt of the Mandatory Redemption Payment by the Holder shall be credited against the Mandatory Redemption Payment.

           2.9           Buy-In.  In addition to any other rights available to the Holder, but without any duplicative recovery by the Holder, if the Company fails to deliver to the Holder the Conversion Shares issuable upon conversion of this Note by the Delivery Date and if after five (5) business days after the Delivery Date the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Common Stock which the Holder was entitled to receive upon such conversion (a “Buy-In”), then the Company shall pay in cash to the Holder (in addition to any remedies available to or elected by the Holder) the amount by which (A) the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate principal and/or interest amount of the Note for which such conversion was not timely honored, together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty).  For example, if the Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of $10,000 of note principal and/or interest, the Company shall be required to pay the Holder $1,000, plus interest.  The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In.

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2.10           Reservation. During the period the conversion right exists, Borrower will reserve and instruct its Transfer Agent to reserve from its authorized and unissued Common Stock a number of shares of Common Stock equal to 150% of the amount of Common Stock issuable upon the full conversion of this Note. Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

2.11           Maximum Conversion

(a) Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon conversion of this Note (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934 Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. By written notice to the Company, a Holder may waive the provisions of this Section 2.3(a) as to itself but any such waiver will not be effective until the 61st day after delivery thereof and such waiver shall have no effect on any other Holder.

(b)           Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon conversion of this Note (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934 Act, does not exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. This provision may not be waived.

2.12           Short sales.  The Holder shall not sell short the common shares of the Company without first having sent a conversion request to the Company or having such shares available to cover such short sale prior to entering into such short sale.

ARTICLE III

EVENTS OF DEFAULT

An “Event of  Default,”  wherever  used  herein, means any one of the following events  (whatever  the reason and whether it shall be voluntary  or involuntary or effected by operation of law or pursuant to any judgment,  decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

3.1           Failure to Pay Principal or Interest. The Borrower fails to pay any installment of Principal, Interest or other sum due under this Note when due and payable.

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3.2           Breach of Covenant. The Borrower breaches any other covenant or other term or condition of the Purchase Agreement or this Note (including, without limitation, the use of proceeds from this Note in breach of Section 1.6 of this Note) in any material respect and such breach, if subject to cure, continues for a period of ten (10) business days after written notice to the Borrower from the Holder.

3.3           Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein, in the Purchase Agreement, or in any agreement, statement or certificate given in writing pursuant hereto or in connection therewith shall be false or misleading in any material respect as of the date made and the Closing Date.

3.4           Receiver or Trustee. The Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed.

3.5           Judgments. Any money judgment, writ or similar final process shall be entered or filed against Borrower or any of its property or other assets for more than $1,000,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days.

3.6           Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted by or against the Borrower and if instituted against Borrower are not dismissed within thirty (60) days of initiation.

3.7           Non-Payment.  A default by the Borrower under any one or more obligations in an aggregate monetary amount in excess of $200,000 for more than forty-five (45) days after the due date. Any obligations in default prior to December 15th, 2013 are not an “Event of Default” under this agreement.

3.8           Stop Trade. An SEC or judicial stop trade order or trading suspension on any trading market on which such Common Stock may be listed or quoted, that lasts for five or more consecutive trading days.

3.9           Failure to Deliver Common Stock or Replacement Note. Borrower's failure to timely deliver Common Stock to the Holder pursuant to and in the time required by this Note.

                3.10         Failure to Maintain Current Public Information. The Company’s failure to maintain current public information as defined in Rule 144 of the Securities Act of 1933 or failure to timely file its reports as required by Securities Exchange Act of 1934.

3.11         Reverse Splits.  The Borrower effectuates a reverse split of its Common Stock without the prior written consent of the Holder.

3.12         Reservation Default.  Failure by the Borrower to have reserve for issuance upon conversion of the Note the amount of Common stock as set forth in the Purchase Agreement.

3.13         Cross Default. A default by the Borrower of a material term, covenant, warranty or undertaking of any other agreement to which the Borrower and Holder are parties.

3.14         Change in Control. A change in control of the Company without at least fourteen (14) days prior written notice to Holder. A change in control shall mean that more than 30% of the shares of common stock are consolidated in one person or entity so that the person or entity(other than any one or more of the Holders) may control the election of the board of directors or the passage of a proposal that would normally require a shareholder vote without such shareholder vote and that such person or entity was not a holder of shares of the Company at the date of execution hereof.

3.15           Asset Sales.  Any instance, undertaken without written consent  of the Holder, whereby the Company or any of its subsidiaries, sells, transfers, leases or otherwise disposes (including pursuant to a merger) of substantially all of the Company’s assets, including any asset constituting an equity interest in any other person, except sales, transfers, leases and other dispositions of inventory, used, obsolete or surplus equipment or other property, in each case in the ordinary course of the Company’s business and consistent with past practice.

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3.16     Delisting.  Delisting of the Common Stock from on any trading market on which such Common Stock may be listed or quoted.

During the time that any portion of this Note is outstanding,  if any Event of Default has occurred,  the remaining principal amount of this Note, together with interest and other amounts owing in respect   hereof,  to the date of  acceleration  shall become, at the  Holder's  election,  immediately  due and payable in cash,  provided  however,  the Holder may request  (but shall have no obligation  to request)  payment of such amounts in Common Stock of the Borrower. In addition to any other remedies,  the Holder shall have the right (but not the obligation)  to convert this Note at any time after (x) an Event of Default or (y) the Maturity Date at the Conversion Price then in effect. For an Event of Default to be deemed to have occurred, the Holder must provide written notice notifying the Holder when an Event of Default occurs or at the Maturity Date of the Note. Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder. No such rescission or annulment  shall affect any subsequent  Event of Default or impair any right  consequent  thereon.  Upon an Event of Default,  notwithstanding  any other provision of this Note or any Transaction Document,  the Holder shall have no obligation to comply with or adhere to any  limitations,  if any, on the conversion of this Note or the sale of the Conversion Shares, Shares or Other Securities.

ARTICLE IV

MISCELLANEOUS

4.1           Failure or Indulgence Not Waiver. No failure or delay on the part of Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

                4.2           Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Borrower to:Thinspace Technology, Inc., 5535 S. Williamson Blvd., Unit 751, Port Orange, FL 32128, telecopier number: 954-756-8043 and (ii) if to the Holder, to IBC Funds, LLC, 5348 Vegas Drive Suite 333, Las Vegas, NV 89108

4.3           Amendment Provision. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4           Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns.

4.5           Cost of Collection. If default is made in the payment of this Note, Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys' fees.

4.6           Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Delaware. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located in the state of Florida located in Broward County, Florida. Both parties and the individual signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.

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4.7           Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

4.8           Waiver of Jury Trial.  THE PARTIES HEREBY  KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY WAIVE  THE  RIGHT  ANY OF THEM  MAY HAVE TO A TRIAL  BY JURY IN  RESPECT  OF ANY LITIGATION  BASED  HEREON OR ARISING OUT OF,  UNDER OR IN  CONNECTION  WITH THIS AGREEMENT  OR ANY  TRANSACTION  DOCUMENT  OR ANY  COURSE OF  CONDUCT,  COURSE OF DEALING,  STATEMENTS  (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  THIS PROVISION  IS  A  MATERIAL  INDUCEMENT  FOR  THE  PARTIES'  ACCEPTANCE  OF  THIS AGREEMENT.

4.9           Redemption. This Note may not be redeemed or paid without the consent of the Holder except as described in this Note or in the Purchase Agreement.

4.10         Shareholder Status. The Holder shall not have rights as a shareholder of the Borrower with respect to unconverted portions of this Note. However, the Holder will have all the rights of a shareholder of the Borrower with respect to the shares of Common Stock to be received by Holder after delivery by the Holder of a Conversion Notice to the Borrower.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOLLOWS]

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           IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the 21st day of March, 2014.

THINSPACE TECHNOLOGY, INC.
By:	/s/ Robert Zysblat
	Name: Robert Zysblat
	Title: President

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Exhibit A

NOTICE OF CONVERSION

(To be executed by the Holder in order to Convert the Note originally issued March 21, 2014)

TO:

The undersigned hereby irrevocably elects to convert $_________________ of the  principal  amount of the above  Note  into  Shares of Common  Stock of ________________________.,  according to the conditions  stated therein,  as of the Conversion Date written below.

Conversion Date:
Applicable Conversion Price:
Signature:
Name:
Amount to be converted:	$
Aunt of Note unconverted:	$
Conversion Price per share:	$
Number of shares to be issued:
Amount of Interest Converted:	$
Conversion Price per share:	$
Number of Interest shares of to be issued:
Total Number of shares of to be issued:
Issue to:
Broker DTC Participant Code:
Account Number:

If to be issued in Certificate form, send to:

____________________________________

____________________________________

____________________________________

____________________________________

Exhibit B

USE OF PROCEEDS

Thinspace Technology Inc.

EX-10.10

Exhibit 10.10

NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

March 21 , 2014 $50,000

THINSPACE TECHNOLOGY, INC.

8% Convertible Note

Due March 21, 2017

FOR VALUE RECEIVED, Thinspace Technology, Inc. a Delaware corporation (hereinafter called the “Borrower” or the “Company”), hereby promises to pay to GREYSTONE CAPITAL PARTNERS, INC., a Nevada Corporation  (the “Holder”), or order, without demand, the sum of FIFTY THOUSAND Dollars ($50,000), with simple interest accruing at the rate described below, on March 21, 2017(the "Maturity Date").

 NOW THEREFORE, the following terms shall apply to this Note:

ARTICLE I

GENERAL PROVISIONS

1.1           Payments. The entire unpaid principal amount due under this Note (the “Principal”) shall be due and payable on the Maturity Date. Interest on this Note (the “Interest”) will be payable annually. Interest shall be payable in cash or, at the Company’s option, in shares of the Company’s common stock, par value $0.001 per share (the "Common Stock").

           Upon any conversion in part by the Holder in accordance with Article II, the Holder and the Borrower shall in good faith recalculate the outstanding principal balance. Upon any full conversion by the Holder in accordance with Article II of all of the Interest and the Principal due hereunder, all of the Borrower's payment obligations shall terminate. All payments in respect of the indebtedness evidenced hereby shall be applied in the following order: to accrued Interest, Principal, and charges and expenses owing under or in connection with this Note.

           If any payment of interest is paid in Common Stock, the number of shares issuable will be determined utilizing the conversion ratio as set forth in Article II. Notwithstanding the foregoing, the Company’s right to pay this Note, including any Interest due thereunder, in shares of Common Stock upon the Maturity Date is subject to the condition that: (i) the Common Stock is trading on the OTC Markets, OTC Bulletin Board, New York Stock Exchange, NYSE MKT or Nasdaq; and (ii) there is an effective Registration Statement on the Maturity Date or the shares are otherwise eligible for resale pursuant to Rule 144.

1.2           Interest.  Interest shall accrue on the outstanding principal balance hereof at an annual rate equal to eight percent (8%) from the date Principal was advanced in connection with this Note and shall be payable annually unless otherwise converted earlier at the election of the Holder as further described below.  Interest shall be calculated on the basis of a 360-day year and the actual number of days elapsed, to the extent permitted by applicable  law.  Interest hereunder will be paid to the Holder or its assignee in whose name this Note is registered on the records of the Borrower regarding registration and transfers of Notes  (the “Note Register”).  However, should the Company fail to maintain current public information as defined in Rule 144 of the Securities Act of 1933, the interest rate shall increase to 18% per annum for that period when the Company’s filings are not up-to-date and the failure to timely file shall constitute a default allowing for acceleration of the Note.

1.3           Payment Grace Period. From and after the 10th day after an Event of Default under Section 3.1, the Interest Rate applicable to any unpaid amounts owed hereunder shall be increased to eighteen percent (18%) per annum.

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1.4           Conversion Privileges. The conversion privileges set forth in Article II shall remain in full force and effect immediately from the date hereof and until the Note is paid in full regardless of the occurrence of an Event of Default. This Note shall be payable in full on the Maturity Date, unless previously converted into Common Stock in accordance with Article II hereof; provided, that if an Event of Default has occurred, the Holder may elect to extend the Maturity Date by the amount of days of the pendency of the Event of Default.

1.5           Corporate Existence.  So long as this Note remains outstanding, the Company shall not directly or indirectly consummate any merger, reorganization, restructuring, reverse stock split, consolidation, sale of all or substantially all of the Company's assets or any similar transaction or related transactions (each such transaction, a “Fundamental Change”) where the Company is not the surviving entity unless, prior to the consummation a Fundamental Change, the Company shall have given the Holder not less than fourteen (14) days prior written notice to the Holder.  In any such case, the Holder will have the right to put this Note to the Company up to the time of the effectiveness of the Fundamental Change at 150% of the then outstanding Principal plus any unpaid and accrued Interest.

1.6           Use of Proceeds. The proceeds from this Note will be substantially employed by the Company for the purposes set forth on Exhibit B. Without limiting the generality of the foregoing, the Company may not use any proceeds from this Note for payment of salary to Mr. Owen Dukes or Mr. Robert Zysblat.

This Note is subject to the following additional provisions:

ARTICLE II

CONVERSION RIGHTS AND REDEMPTION RIGHTS

The Holder shall have the right to convert the principal and accrued and unpaid interest due under this Note into Shares of the Borrower's Common Stock as set forth below.

2.1           Conversion into the Borrower's Common Stock.

(a)           The Holder shall have the right from and after the date of the issuance of this Note and then at any time until this Note is fully paid, to convert any outstanding and unpaid principal portion of this Note, and accrued Interest, at the election of the Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully paid and non-assessable shares of Common Stock as such stock exists on the date of issuance of this Note (such shares, the “Conversion Shares”), or any shares of capital stock of Borrower into which such Common Stock shall hereafter be changed or reclassified (the “Other Securities”), at the conversion price as defined in Section 2.1(b) hereof (the "Conversion Price"), determined as provided herein. Upon delivery to the Borrower of a completed Notice of Conversion, a form of which is attached hereto as Exhibit A, Borrower shall issue and deliver to the Holder within three (3) business days from the Conversion Date (such third day being the “Delivery Date”) that number of Conversion Shares for the portion of the Note converted in accordance with the foregoing. At the election of the Holder, the Borrower will deliver accrued but unpaid interest on the principal amount of the Note being converted in the manner provided in Section 1.1 through the Conversion Date directly to the Holder on or before the Delivery Date. The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal of this Note and accrued interest to be converted, by the Conversion Price.

(b)Subject to adjustment as provided in Section 2.1(c) hereof, the Conversion Price per share shall be 25% of the lowest closing bid price as of 4 pm (New York Time) for the Company’s stock during the previous 20 trading days.

(c)            The Conversion Price and number and kind of shares or other securities to be issued upon conversion determined pursuant to Section 2.1(a), shall be subject to adjustment from time to time upon the happening of the following certain events while this conversion right remains outstanding:

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                                A.           Reorganization, Consolidation, Merger, etc.; Reclassification.  In case at any time or from time to time, the Company shall, subject to Section 1.5 hereof, effect a Fundamental Change, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Note, on the conversion hereof as provided in Article II, at any time after the consummation of such Fundamental Change, shall receive, in lieu of the Conversion Shares (or Other Securities) issuable on such conversion prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation of a Fundamental Change if such Holder had so converted this Note, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 2.1(c)(E).

                                           If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes that may be issued or outstanding, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

                                B.           Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of this Note after the effective date of such dissolution pursuant to this Article II to a bank or trust company (a “Trustee”) having its principal office in New York, NY, as trustee for the Holder of the Notes.

                                C.           Continuation of Terms. Upon any Fundamental Change or transfer (and any dissolution following any transfer) referred to in this Article II, this Note shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the conversion of this Note after the consummation of such Fundamental Change or transfer or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Note as provided in Section 2.1(c)(E). In the event this Note does not continue in full force and effect after the consummation of the transaction described in this Article II, then only in such event will the Company's securities and property (including cash, where applicable) receivable by the Holder of this Note be delivered to the Trustee as contemplated by Section 2.1(c)(B).

 D.           Share Issuance.  If at any time this Note is outstanding the Company shall offer, issue or agree to issue any common stock or securities convertible into or exercisable for shares of common stock (or modify any of the foregoing which may be outstanding) to any person or entity at a price per share or conversion or exercise price per share which shall be less than the then applicable Conversion Price in respect of the Shares, without the consent of the Holders of this Note, except with respect to Excepted Issuances, then the Company shall issue, for each such occasion, additional shares of Common Stock to each Holder so that the average per share purchase price of the shares of Common Stock issued to the Holder (of only the Conversion Shares still owned by the Holder) is equal to such other lower price per share and the Conversion Price shall automatically be reduced to such other lower price per share.  For the purposes hereof, "Excepted Issuances" means any offer, issuance or agreement to issue any common stock or securities convertible into or exercisable for shares of common stock (or modify any of the foregoing which may be outstanding) in connection with (i) full or partial consideration in connection with a strategic merger, consolidation or purchase of substantially all of the securities or assets ofcorporation or other entity, (ii) the Company’s issuance of securities in connection with strategic license agreements and other partnering arrangements so long as such issuances are not for the purpose of raising capital, (iii) the Company’s issuance of Common Stock or the issuance or grants of options to purchase Common Stock pursuant to the Company’s stock option plans and employee stock purchase plans, (iv) the conversion of any of the Notes, (v) the payment of any interest on the Notes, and (vi) as has been described in the Reports filed with the Commission or delivered to the Holder prior to the issuance of this Note (collectively, the “Excepted Issuances”).  The delivery to the Holder of the additional shares of Common Stock shall be not later than the closing date of the transaction giving rise to the requirement to issue additional shares of Common Stock.  For purposes of the issuance and adjustment described in this paragraph, the issuance of any security of the Company carrying the right to convert such security into shares of Common Stock or of any warrant, right or option to purchase Common Stock shall result in the issuance of the additional shares of Common Stock upon the issuance of such convertible security, warrant, right or option and again at any time upon any subsequent issuances of shares of Common Stock upon exercise of such conversion or purchase rights if such issuance is at a price lower than the Conversion Price in effect upon such issuance.  The rights of the Holder set forth in this Section 2.1 (c)(D), arein addition to any other rights the Holder has pursuant to this Note, any Transaction Document and any other agreement referred to or entered into in connection herewith.

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                                E.           Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) subject to Section 1.5 hereof, combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the Conversion Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Conversion Price then in effect. The Conversion Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 2.1(c)(E). The number of Conversion Shares that the Holder of this Note shall thereafter, on the conversion hereof as provided in Article II, be entitled to receive shall be adjusted to a number determined by multiplying the number of Conversion Shares that would otherwise (but for the provisions of this Section 2.1(c)(E)) be issuable on such conversion by a fraction of which (a) the numerator is the Conversion Price that would otherwise (but for the provisions of this Section 2.1(c)(E)) be in effect, and (b) the denominator is the Conversion Price in effect on the date of such conversion.

                                F.           Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the conversion of the Notes, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Note and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Conversion Price and the number of Conversion Shares to be received upon conversion of this Note, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Note. The Company will forthwith mail a copy of each such certificate to the Holder of the Note and any transfer agent of the Company.

 G.           Delay in Clearing. The Company shall issue shares to the Holder as set forth in 2.1(b) (“Initial Conversion Price”). However if the conversion price for the common stock on the Clearing Date (defined below) is lower than the Initial Conversion Price, then the Initial Conversion Price shall be adjusted such that the Discount shall be taken based on the Clearing Date, and the Company shall issue additional shares to Purchaser to reflect such adjusted Conversion Price, with such additional issuance being subject to the limitation on conversion as set forth in 2.11, below.  For purposes of this Agreement, the Clearing Date shall be on the date in which the conversion shares are deposited into the Purchaser’s brokerage account and Purchaser’s broker has confirmed with Purchaser that the Purchaser may execute trades of the conversion shares. The Holder shall represent and warrant that the shares were promptly tendered to the Holder’s broker and that the delay is not the result of the Holder failing to provide the Broker or Clearing Firm with appropriate documentation to clear such shares including but not limited to this Note.

2.2           Method of Conversion. This Note may be converted by the Holder in whole or in part as described in Section 2.1(a) hereof and the Securities Purchase Agreement, dated on or about the date hereof, between the Company and the Holder (the “Purchase Agreement”). Upon partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid.

2.3           Issuance Below Par.  The Parties hereto agree that Delaware Law allows for the issuance of conversion shares under this section even if such conversion price is less than the shares’ stated par value, and that such shares shall be issued in response to a Conversion Request regardless of Conversion Price.

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2.4           Intentionally Left Blank.

2.5           Conversion of Note.

(a)           Upon the conversion of this Note or part thereof, the Company shall, at its own cost and expense, take all necessary action, including obtaining and delivering, an opinion of counsel to assure that the Company's transfer agent shall issue stock certificates in the name of Holder (or its nominee) or such other persons as designated by Holder and in such denominations to be specified at conversion representing the number of Conversion Shares issuable upon such conversion. The Company warrants that no instructions other than these instructions have been or will be given to the transfer agent of the Company's Common Stock and that, unless waived by the Holder, the Conversion Shares will be free-trading, and freely transferable, and will not contain a legend restricting the resale or transferability of the Conversion Shares provided the Conversion Shares are being sold pursuant to an effective registration statement covering the Conversion Shares or are otherwise exempt from registration.

(b)           Holder will give notice of its decision to exercise its right to convert this Note or part thereof by telecopying an executed and completed Notice of Conversion (a form of which is attached as Exhibit A to the Note) to the Company via confirmed telecopier transmission, email, or overnight courier or otherwise pursuant to Section 4.2 of this Note. The Holder will not be required to surrender this Note until this Note has been fully converted or satisfied, with each date on which a Notice of Conversion is telecopied to the Company in accordance with the provisions hereof shall be deemed a Conversion Date (as defined above). The Company will itself or cause the Company’s transfer agent to transmit the Company's Common Stock certificates representing the Conversion Shares issuable upon conversion of this Note to the Holder via express courier for receipt by such Holder on or before the Delivery Date (as defined above). In the event the Conversion Shares are electronically transferable, then delivery of the Conversion Shares must be made by electronic transfer provided request for such electronic transfer has been made by the Holder and the Holder has complied with all applicable securities laws in connection with the sale of the Common Stock, including, without limitation, the prospectus delivery requirements.  A Note representing the balance of this Note not so converted will be provided by the Company to the Holder if requested by Holder, provided the Holder delivers the original Note to the Company.

(c)           The Company understands and agrees that a delay in the delivery of the Conversion Shares in the form required pursuant to Section 2.5(a) hereof, after the Delivery Date (as hereinafter defined) could result in economic loss to the Holder. As compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of Conversion Shares upon Conversion of the Note in the amount of $500 per business day after the Delivery Date for each $10,000 of Note principal amount being converted of the corresponding Conversion Shares which are not timely delivered. The Company shall pay any payments incurred under this Section in immediately available funds upon demand. Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Conversion Shares by the Delivery Date the Holder will be entitled to revoke all or part of the relevant Notice of Conversion  by delivery of a notice to such effect to the Company whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the delivery of such notice, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

(d)           Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

2.6           Injunction Posting of Bond. In the event a Holder shall elect to convert a Note or part thereof in whole or in part, the Company may not refuse conversion based on any claim that such Holder or any one associated or affiliated with such Holder has been engaged in any violation of law, or for any other reason, unless an injunction from a court, on notice, restraining and or enjoining conversion of all or part of such Note shall have been sought and obtained by the Company and the Company has posted a surety bond for the benefit of such Holder in the amount of 120% of the amount of the Note, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent Holder obtains judgment.

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2.7           Optional Redemption.

(a)           Provided that no Event of Default under the Subscription Agreement or this Note exists, the Borrower will have the option of prepaying the outstanding principal amount of this Note ("Optional Redemption"), in whole or in part, together with interest accrued thereon, by paying to the Holder a sum of money equal to one hundred fifty percent (150%) of the principal amount to be redeemed, together with accrued but unpaid interest thereon and interest that will accrue until the actual repayment date and any and all other sums due, accrued or payable to the Holder arising under this Note, the Purchase Agreement or any Transaction Document (as defined in the Purchase Agreement) (the "Redemption Amount") on the day written notice of redemption (the "Notice of Redemption") is given to the Holder. The Notice of Redemption shall specify the date for such Optional Redemption (the "Redemption Payment Date"), which date shall be not less than five (5) business days after the date of the Notice of Redemption (the "Redemption Period"). A Notice of Redemption shall not be effective with respect to any portion of this Note for which the Holder has a pending election to convert, or for Conversion Notices given by the Holder prior to the Redemption Payment Date. On the Redemption Payment Date, the Redemption Amount shall be paid in good funds to the Holder. In the event the Borrower fails to pay the Redemption Amount on the Redemption Payment Date as set forth herein, then (i) such Notice of Redemption will be null and void, (ii) Borrower will have no further right to deliver another Notice of Redemption, and (iii) Borrower’s failure may be deemed by Holder to be a non-curable Event of Default. The funds for such redemption may not come from a third party financing or other financing provided by the holder and may not result in the subsequent assignment of this debt.

           2.8           Mandatory Redemption at Holder’s Election.  In the event the Company is prohibited from issuing Conversion Shares, or fails to timely deliver Shares on a Delivery Date, or upon the occurrence of any other Event of Default (as defined in this Note or in the Purchase Agreement) or for any reason other than pursuant to the limitations set forth in Section 2.3 hereof, then at the Holder's election, the Company must pay to the Holder ten (10) business days after request by the Holder, at the Holder's election, a sum of money in immediately available terms equal to the greater of (i) the product of the outstanding principal amount of the Note designated by the Holder multiplied by 150%, or (ii) the product of the number of Conversion Shares otherwise deliverable upon conversion of an amount of Note principal and/or interest designated by the Holder (with the date of giving of such designation being a “Deemed Conversion Date”) at the then Conversion Price that would be in effect on the Deemed Conversion Date multiplied by the average of the closing bid prices for the Common Stock for the five consecutive trading days preceding either: (1) the date the Company becomes obligated to pay the Mandatory Redemption Payment, or (2) the date on which the Mandatory Redemption Payment is made in full, whichever is greater, together with accrued but unpaid interest thereon and any liquidated damages then payable (“Mandatory Redemption Payment”).  The Mandatory Redemption Payment must be received by the Holder on the same date as the Company Shares otherwise deliverable or within ten (10) business days after request, whichever is sooner (“Mandatory Redemption Payment Date”).  Upon receipt of the Mandatory Redemption Payment, the corresponding Note principal and interest will be deemed paid and no longer outstanding. Liquidated damages calculated pursuant to Section 2.5(c) hereof, that have been paid or accrued for the twenty (20) day period prior to the actual receipt of the Mandatory Redemption Payment by the Holder shall be credited against the Mandatory Redemption Payment.

           2.9           Buy-In.  In addition to any other rights available to the Holder, but without any duplicative recovery by the Holder, if the Company fails to deliver to the Holder the Conversion Shares issuable upon conversion of this Note by the Delivery Date and if after five (5) business days after the Delivery Date the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Common Stock which the Holder was entitled to receive upon such conversion (a “Buy-In”), then the Company shall pay in cash to the Holder (in addition to any remedies available to or elected by the Holder) the amount by which (A) the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate principal and/or interest amount of the Note for which such conversion was not timely honored, together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty).  For example, if the Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of $10,000 of note principal and/or interest, the Company shall be required to pay the Holder $1,000, plus interest.  The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In.

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2.10           Reservation. During the period the conversion right exists, Borrower will reserve and instruct its Transfer Agent to reserve from its authorized and unissued Common Stock a number of shares of Common Stock equal to 150% of the amount of Common Stock issuable upon the full conversion of this Note. Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

2.11           Maximum Conversion

(a) Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon conversion of this Note (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934 Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. By written notice to the Company, a Holder may waive the provisions of this Section 2.3(a) as to itself but any such waiver will not be effective until the 61st day after delivery thereof and such waiver shall have no effect on any other Holder.

(b)           Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon conversion of this Note (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934 Act, does not exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. This provision may not be waived.

2.12           Short sales.  The Holder shall not sell short the common shares of the Company without first having sent a conversion request to the Company or having such shares available to cover such short sale prior to entering into such short sale.

ARTICLE III

EVENTS OF DEFAULT

An “Event of  Default,”  wherever  used  herein, means any one of the following events  (whatever  the reason and whether it shall be voluntary  or involuntary or effected by operation of law or pursuant to any judgment,  decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

3.1           Failure to Pay Principal or Interest. The Borrower fails to pay any installment of Principal, Interest or other sum due under this Note when due and payable.

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3.2           Breach of Covenant. The Borrower breaches any other covenant or other term or condition of the Purchase Agreement or this Note (including, without limitation, the use of proceeds from this Note in breach of Section 1.6 of this Note) in any material respect and such breach, if subject to cure, continues for a period of ten (10) business days after written notice to the Borrower from the Holder.

3.3           Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein, in the Purchase Agreement, or in any agreement, statement or certificate given in writing pursuant hereto or in connection therewith shall be false or misleading in any material respect as of the date made and the Closing Date.

3.4           Receiver or Trustee. The Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed.

3.5           Judgments. Any money judgment, writ or similar final process shall be entered or filed against Borrower or any of its property or other assets for more than $1,000,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days.

3.6           Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted by or against the Borrower and if instituted against Borrower are not dismissed within thirty (60) days of initiation.

3.7           Non-Payment.  A default by the Borrower under any one or more obligations in an aggregate monetary amount in excess of $200,000 for more than forty-five (45) days after the due date. Any obligations in default prior to December 15th, 2013 are not an “Event of Default” under this agreement.

3.8           Stop Trade. An SEC or judicial stop trade order or trading suspension on any trading market on which such Common Stock may be listed or quoted, that lasts for five or more consecutive trading days.

3.9           Failure to Deliver Common Stock or Replacement Note. Borrower's failure to timely deliver Common Stock to the Holder pursuant to and in the time required by this Note.

                3.10         Failure to Maintain Current Public Information. The Company’s failure to maintain current public information as defined in Rule 144 of the Securities Act of 1933 or failure to timely file its reports as required by Securities Exchange Act of 1934.

3.11         Reverse Splits.  The Borrower effectuates a reverse split of its Common Stock without the prior written consent of the Holder.

3.12         Reservation Default.  Failure by the Borrower to have reserve for issuance upon conversion of the Note the amount of Common stock as set forth in the Purchase Agreement.

3.13         Cross Default. A default by the Borrower of a material term, covenant, warranty or undertaking of any other agreement to which the Borrower and Holder are parties.

3.14         Change in Control. A change in control of the Company without at least fourteen (14) days prior written notice to Holder. A change in control shall mean that more than 30% of the shares of common stock are consolidated in one person or entity so that the person or entity(other than any one or more of the Holders) may control the election of the board of directors or the passage of a proposal that would normally require a shareholder vote without such shareholder vote and that such person or entity was not a holder of shares of the Company at the date of execution hereof.

3.15         Asset Sales.  Any instance, undertaken without written consent  of the Holder, whereby the Company or any of its subsidiaries, sells, transfers, leases or otherwise disposes (including pursuant to a merger) of substantially all of the Company’s assets, including any asset constituting an equity interest in any other person, except sales, transfers, leases and other dispositions of inventory, used, obsolete or surplus equipment or other property, in each case in the ordinary course of the Company’s business and consistent with past practice.

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3.16     Delisting.  Delisting of the Common Stock from on any trading market on which such Common Stock may be listed or quoted.

During the time that any portion of this Note is outstanding,  if any Event of Default has occurred,  the remaining principal amount of this Note, together with interest and other amounts owing in respect   hereof,  to the date of  acceleration  shall become, at the  Holder's  election,  immediately  due and payable in cash,  provided  however,  the Holder may request  (but shall have no obligation  to request)  payment of such amounts in Common Stock of the Borrower. In addition to any other remedies,  the Holder shall have the right (but not the obligation)  to convert this Note at any time after (x) an Event of Default or (y) the Maturity Date at the Conversion Price then in effect. For an Event of Default to be deemed to have occurred, the Holder must provide written notice notifying the Holder when an Event of Default occurs or at the Maturity Date of the Note. Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder. No such rescission or annulment  shall affect any subsequent  Event of Default or impair any right  consequent  thereon.  Upon an Event of Default,  notwithstanding  any other provision of this Note or any Transaction Document,  the Holder shall have no obligation to comply with or adhere to any  limitations,  if any, on the conversion of this Note or the sale of the Conversion Shares, Shares or Other Securities.

ARTICLE IV

MISCELLANEOUS

4.1           Failure or Indulgence Not Waiver. No failure or delay on the part of Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

               4.2           Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Borrower to:Thinspace Technology, Inc., 5535 S. Williamson Blvd., Unit 751, Port Orange, FL 32128, telecopier number: 954-756-8043 and (ii) if to the Holder, to Greystone Capital Partners, Inc., 1170 Kane Concourse, #404, Bay Harbor Islands, FL 33154.

4.3           Amendment Provision. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4           Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns.

4.5           Cost of Collection. If default is made in the payment of this Note, Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys' fees.

4.6           Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Delaware. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located in the state of Florida located in Broward County, Florida. Both parties and the individual signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.

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4.7           Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

4.8           Waiver of Jury Trial.  THE PARTIES HEREBY  KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY WAIVE  THE  RIGHT  ANY OF THEM  MAY HAVE TO A TRIAL  BY JURY IN  RESPECT  OF ANY LITIGATION  BASED  HEREON OR ARISING OUT OF,  UNDER OR IN  CONNECTION  WITH THIS AGREEMENT  OR ANY  TRANSACTION  DOCUMENT  OR ANY  COURSE OF  CONDUCT,  COURSE OF DEALING,  STATEMENTS  (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  THIS PROVISION  IS  A  MATERIAL  INDUCEMENT  FOR  THE  PARTIES'  ACCEPTANCE  OF  THIS AGREEMENT.

4.9           Redemption. This Note may not be redeemed or paid without the consent of the Holder except as described in this Note or in the Purchase Agreement.

4.10         Shareholder Status. The Holder shall not have rights as a shareholder of the Borrower with respect to unconverted portions of this Note. However, the Holder will have all the rights of a shareholder of the Borrower with respect to the shares of Common Stock to be received by Holder after delivery by the Holder of a Conversion Notice to the Borrower.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOLLOWS]

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           IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the 21st day of March, 2014.

THINSPACE TECHNOLOGY, INC.
By:	/s/ Robert Zysblat
	Name: Robert Zysblat
	Title: President

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Exhibit A

NOTICE OF CONVERSION

(To be executed by the Holder in order to Convert the Note originally issued March 21, 2014)

TO:

The undersigned hereby irrevocably elects to convert $_________________ of the  principal  amount of the above  Note  into  Shares of Common  Stock of ________________________.,  according to the conditions  stated therein,  as of the Conversion Date written below.

Conversion Date:
Applicable Conversion Price:
Signature:
Name:
Amount to be converted:	$
Aunt of Note unconverted:	$
Conversion Price per share:	$
Number of shares to be issued:
Amount of Interest Converted:	$
Conversion Price per share:	$
Number of Interest shares of to be issued:
Total Number of shares of to be issued:
Issue to:
Broker DTC Participant Code:
Account Number:

If to be issued in Certificate form, send to:

____________________________________

____________________________________

____________________________________

____________________________________

Exhibit B

USE OF PROCEEDS

EX-10.11

Exhibit 10.11

NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

March 26 , 2014 $50,000

THINSPACE TECHNOLOGY, INC.

8% Convertible Note

Due March 26, 2017

FOR VALUE RECEIVED, Thinspace Technology, Inc. a Delaware corporation (hereinafter called the “Borrower” or the “Company”), hereby promises to pay to GREYSTONE CAPITAL PARTNERS, INC., a Nevada Corporation  (the “Holder”), or order, without demand, the sum of FIFTY THOUSAND Dollars ($50,000), with simple interest accruing at the rate described below, on March 26, 2017(the "Maturity Date").

 NOW THEREFORE, the following terms shall apply to this Note:

ARTICLE I

GENERAL PROVISIONS

1.1           Payments. The entire unpaid principal amount due under this Note (the “Principal”) shall be due and payable on the Maturity Date. Interest on this Note (the “Interest”) will be payable annually. Interest shall be payable in cash or, at the Company’s option, in shares of the Company’s common stock, par value $0.001 per share (the "Common Stock").

           Upon any conversion in part by the Holder in accordance with Article II, the Holder and the Borrower shall in good faith recalculate the outstanding principal balance. Upon any full conversion by the Holder in accordance with Article II of all of the Interest and the Principal due hereunder, all of the Borrower's payment obligations shall terminate. All payments in respect of the indebtedness evidenced hereby shall be applied in the following order: to accrued Interest, Principal, and charges and expenses owing under or in connection with this Note.

           If any payment of interest is paid in Common Stock, the number of shares issuable will be determined utilizing the conversion ratio as set forth in Article II. Notwithstanding the foregoing, the Company’s right to pay this Note, including any Interest due thereunder, in shares of Common Stock upon the Maturity Date is subject to the condition that: (i) the Common Stock is trading on the OTC Markets, OTC Bulletin Board, New York Stock Exchange, NYSE MKT or Nasdaq; and (ii) there is an effective Registration Statement on the Maturity Date or the shares are otherwise eligible for resale pursuant to Rule 144.

1.2           Interest.  Interest shall accrue on the outstanding principal balance hereof at an annual rate equal to eight percent (8%) from the date Principal was advanced in connection with this Note and shall be payable annually unless otherwise converted earlier at the election of the Holder as further described below.  Interest shall be calculated on the basis of a 360-day year and the actual number of days elapsed, to the extent permitted by applicable  law.  Interest hereunder will be paid to the Holder or its assignee in whose name this Note is registered on the records of the Borrower regarding registration and transfers of Notes  (the “Note Register”).  However, should the Company fail to maintain current public information as defined in Rule 144 of the Securities Act of 1933, the interest rate shall increase to 18% per annum for that period when the Company’s filings are not up-to-date and the failure to timely file shall constitute a default allowing for acceleration of the Note.

1.3           Payment Grace Period. From and after the 10th day after an Event of Default under Section 3.1, the Interest Rate applicable to any unpaid amounts owed hereunder shall be increased to eighteen percent (18%) per annum.

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1.4           Conversion Privileges. The conversion privileges set forth in Article II shall remain in full force and effect immediately from the date hereof and until the Note is paid in full regardless of the occurrence of an Event of Default. This Note shall be payable in full on the Maturity Date, unless previously converted into Common Stock in accordance with Article II hereof; provided, that if an Event of Default has occurred, the Holder may elect to extend the Maturity Date by the amount of days of the pendency of the Event of Default.

1.5           Corporate Existence.  So long as this Note remains outstanding, the Company shall not directly or indirectly consummate any merger, reorganization, restructuring, reverse stock split, consolidation, sale of all or substantially all of the Company's assets or any similar transaction or related transactions (each such transaction, a “Fundamental Change”) where the Company is not the surviving entity unless, prior to the consummation a Fundamental Change, the Company shall have given the Holder not less than fourteen (14) days prior written notice to the Holder.  In any such case, the Holder will have the right to put this Note to the Company up to the time of the effectiveness of the Fundamental Change at 150% of the then outstanding Principal plus any unpaid and accrued Interest.

1.6           Use of Proceeds. The proceeds from this Note will be substantially employed by the Company for the purposes set forth on Exhibit B. Without limiting the generality of the foregoing, the Company may not use any proceeds from this Note for payment of salary to Mr. Owen Dukes or Mr. Robert Zysblat.

This Note is subject to the following additional provisions:

ARTICLE II

CONVERSION RIGHTS AND REDEMPTION RIGHTS

The Holder shall have the right to convert the principal and accrued and unpaid interest due under this Note into Shares of the Borrower's Common Stock as set forth below.

2.1           Conversion into the Borrower's Common Stock.

(a)           The Holder shall have the right from and after the date of the issuance of this Note and then at any time until this Note is fully paid, to convert any outstanding and unpaid principal portion of this Note, and accrued Interest, at the election of the Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully paid and non-assessable shares of Common Stock as such stock exists on the date of issuance of this Note (such shares, the “Conversion Shares”), or any shares of capital stock of Borrower into which such Common Stock shall hereafter be changed or reclassified (the “Other Securities”), at the conversion price as defined in Section 2.1(b) hereof (the "Conversion Price"), determined as provided herein. Upon delivery to the Borrower of a completed Notice of Conversion, a form of which is attached hereto as Exhibit A, Borrower shall issue and deliver to the Holder within three (3) business days from the Conversion Date (such third day being the “Delivery Date”) that number of Conversion Shares for the portion of the Note converted in accordance with the foregoing. At the election of the Holder, the Borrower will deliver accrued but unpaid interest on the principal amount of the Note being converted in the manner provided in Section 1.1 through the Conversion Date directly to the Holder on or before the Delivery Date. The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal of this Note and accrued interest to be converted, by the Conversion Price.

(b)Subject to adjustment as provided in Section 2.1(c) hereof, the Conversion Price per share shall be 25% of the lowest closing bid price as of 4 pm (New York Time) for the Company’s stock during the previous 20 trading days.

(c)            The Conversion Price and number and kind of shares or other securities to be issued upon conversion determined pursuant to Section 2.1(a), shall be subject to adjustment from time to time upon the happening of the following certain events while this conversion right remains outstanding:

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                                A.           Reorganization, Consolidation, Merger, etc.; Reclassification.  In case at any time or from time to time, the Company shall, subject to Section 1.5 hereof, effect a Fundamental Change, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Note, on the conversion hereof as provided in Article II, at any time after the consummation of such Fundamental Change, shall receive, in lieu of the Conversion Shares (or Other Securities) issuable on such conversion prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation of a Fundamental Change if such Holder had so converted this Note, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 2.1(c)(E).

                                           If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes that may be issued or outstanding, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

                                B.           Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of this Note after the effective date of such dissolution pursuant to this Article II to a bank or trust company (a “Trustee”) having its principal office in New York, NY, as trustee for the Holder of the Notes.

                                C.           Continuation of Terms. Upon any Fundamental Change or transfer (and any dissolution following any transfer) referred to in this Article II, this Note shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the conversion of this Note after the consummation of such Fundamental Change or transfer or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Note as provided in Section 2.1(c)(E). In the event this Note does not continue in full force and effect after the consummation of the transaction described in this Article II, then only in such event will the Company's securities and property (including cash, where applicable) receivable by the Holder of this Note be delivered to the Trustee as contemplated by Section 2.1(c)(B).

D.           Share Issuance.  If at any time this Note is outstanding the Company shall offer, issue or agree to issue any common stock or securities convertible into or exercisable for shares of common stock (or modify any of the foregoing which may be outstanding) to any person or entity at a price per share or conversion or exercise price per share which shall be less than the then applicable Conversion Price in respect of the Shares, without the consent of the Holders of this Note, except with respect to Excepted Issuances, then the Company shall issue, for each such occasion, additional shares of Common Stock to each Holder so that the average per share purchase price of the shares of Common Stock issued to the Holder (of only the Conversion Shares still owned by the Holder) is equal to such other lower price per share and the Conversion Price shall automatically be reduced to such other lower price per share.  For the purposes hereof, "Excepted Issuances" means any offer, issuance or agreement to issue any common stock or securities convertible into or exercisable for shares of common stock (or modify any of the foregoing which may be outstanding) in connection with (i) full or partial consideration in connection with a strategic merger, consolidation or purchase of substantially all of the securities or assets ofcorporation or other entity, (ii) the Company’s issuance of securities in connection with strategic license agreements and other partnering arrangements so long as such issuances are not for the purpose of raising capital, (iii) the Company’s issuance of Common Stock or the issuance or grants of options to purchase Common Stock pursuant to the Company’s stock option plans and employee stock purchase plans, (iv) the conversion of any of the Notes, (v) the payment of any interest on the Notes, and (vi) as has been described in the Reports filed with the Commission or delivered to the Holder prior to the issuance of this Note (collectively, the “Excepted Issuances”).  The delivery to the Holder of the additional shares of Common Stock shall be not later than the closing date of the transaction giving rise to the requirement to issue additional shares of Common Stock.  For purposes of the issuance and adjustment described in this paragraph, the issuance of any security of the Company carrying the right to convert such security into shares of Common Stock or of any warrant, right or option to purchase Common Stock shall result in the issuance of the additional shares of Common Stock upon the issuance of such convertible security, warrant, right or option and again at any time upon any subsequent issuances of shares of Common Stock upon exercise of such conversion or purchase rights if such issuance is at a price lower than the Conversion Price in effect upon such issuance.  The rights of the Holder set forth in this Section 2.1 (c)(D), arein addition to any other rights the Holder has pursuant to this Note, any Transaction Document and any other agreement referred to or entered into in connection herewith.

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                                E.           Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) subject to Section 1.5 hereof, combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the Conversion Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Conversion Price then in effect. The Conversion Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 2.1(c)(E). The number of Conversion Shares that the Holder of this Note shall thereafter, on the conversion hereof as provided in Article II, be entitled to receive shall be adjusted to a number determined by multiplying the number of Conversion Shares that would otherwise (but for the provisions of this Section 2.1(c)(E)) be issuable on such conversion by a fraction of which (a) the numerator is the Conversion Price that would otherwise (but for the provisions of this Section 2.1(c)(E)) be in effect, and (b) the denominator is the Conversion Price in effect on the date of such conversion.

                                F.           Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the conversion of the Notes, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Note and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Conversion Price and the number of Conversion Shares to be received upon conversion of this Note, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Note. The Company will forthwith mail a copy of each such certificate to the Holder of the Note and any transfer agent of the Company.

 G.           Delay in Clearing. The Company shall issue shares to the Holder as set forth in 2.1(b) (“Initial Conversion Price”). However if the conversion price for the common stock on the Clearing Date (defined below) is lower than the Initial Conversion Price, then the Initial Conversion Price shall be adjusted such that the Discount shall be taken based on the Clearing Date, and the Company shall issue additional shares to Purchaser to reflect such adjusted Conversion Price, with such additional issuance being subject to the limitation on conversion as set forth in 2.11, below.  For purposes of this Agreement, the Clearing Date shall be on the date in which the conversion shares are deposited into the Purchaser’s brokerage account and Purchaser’s broker has confirmed with Purchaser that the Purchaser may execute trades of the conversion shares. The Holder shall represent and warrant that the shares were promptly tendered to the Holder’s broker and that the delay is not the result of the Holder failing to provide the Broker or Clearing Firm with appropriate documentation to clear such shares including but not limited to this Note.

2.2           Method of Conversion. This Note may be converted by the Holder in whole or in part as described in Section 2.1(a) hereof and the Securities Purchase Agreement, dated on or about the date hereof, between the Company and the Holder (the “Purchase Agreement”). Upon partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid.

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2.3           Issuance Below Par.  The Parties hereto agree that Delaware Law allows for the issuance of conversion shares under this section even if such conversion price is less than the shares’ stated par value, and that such shares shall be issued in response to a Conversion Request regardless of Conversion Price.

2.4           Intentionally Left Blank.

2.5           Conversion of Note.

(a)           Upon the conversion of this Note or part thereof, the Company shall, at its own cost and expense, take all necessary action, including obtaining and delivering, an opinion of counsel to assure that the Company's transfer agent shall issue stock certificates in the name of Holder (or its nominee) or such other persons as designated by Holder and in such denominations to be specified at conversion representing the number of Conversion Shares issuable upon such conversion. The Company warrants that no instructions other than these instructions have been or will be given to the transfer agent of the Company's Common Stock and that, unless waived by the Holder, the Conversion Shares will be free-trading, and freely transferable, and will not contain a legend restricting the resale or transferability of the Conversion Shares provided the Conversion Shares are being sold pursuant to an effective registration statement covering the Conversion Shares or are otherwise exempt from registration.

(b)           Holder will give notice of its decision to exercise its right to convert this Note or part thereof by telecopying an executed and completed Notice of Conversion (a form of which is attached as Exhibit A to the Note) to the Company via confirmed telecopier transmission, email, or overnight courier or otherwise pursuant to Section 4.2 of this Note. The Holder will not be required to surrender this Note until this Note has been fully converted or satisfied, with each date on which a Notice of Conversion is telecopied to the Company in accordance with the provisions hereof shall be deemed a Conversion Date (as defined above). The Company will itself or cause the Company’s transfer agent to transmit the Company's Common Stock certificates representing the Conversion Shares issuable upon conversion of this Note to the Holder via express courier for receipt by such Holder on or before the Delivery Date (as defined above). In the event the Conversion Shares are electronically transferable, then delivery of the Conversion Shares must be made by electronic transfer provided request for such electronic transfer has been made by the Holder and the Holder has complied with all applicable securities laws in connection with the sale of the Common Stock, including, without limitation, the prospectus delivery requirements.  A Note representing the balance of this Note not so converted will be provided by the Company to the Holder if requested by Holder, provided the Holder delivers the original Note to the Company.

(c)           The Company understands and agrees that a delay in the delivery of the Conversion Shares in the form required pursuant to Section 2.5(a) hereof, after the Delivery Date (as hereinafter defined) could result in economic loss to the Holder. As compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of Conversion Shares upon Conversion of the Note in the amount of $500 per business day after the Delivery Date for each $10,000 of Note principal amount being converted of the corresponding Conversion Shares which are not timely delivered. The Company shall pay any payments incurred under this Section in immediately available funds upon demand. Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Conversion Shares by the Delivery Date the Holder will be entitled to revoke all or part of the relevant Notice of Conversion  by delivery of a notice to such effect to the Company whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the delivery of such notice, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

(d)           Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

2.6           Injunction Posting of Bond. In the event a Holder shall elect to convert a Note or part thereof in whole or in part, the Company may not refuse conversion based on any claim that such Holder or any one associated or affiliated with such Holder has been engaged in any violation of law, or for any other reason, unless an injunction from a court, on notice, restraining and or enjoining conversion of all or part of such Note shall have been sought and obtained by the Company and the Company has posted a surety bond for the benefit of such Holder in the amount of 120% of the amount of the Note, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent Holder obtains judgment.

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2.7           Optional Redemption.

(a)           Provided that no Event of Default under the Subscription Agreement or this Note exists, the Borrower will have the option of prepaying the outstanding principal amount of this Note ("Optional Redemption"), in whole or in part, together with interest accrued thereon, by paying to the Holder a sum of money equal to one hundred fifty percent (150%) of the principal amount to be redeemed, together with accrued but unpaid interest thereon and interest that will accrue until the actual repayment date and any and all other sums due, accrued or payable to the Holder arising under this Note, the Purchase Agreement or any Transaction Document (as defined in the Purchase Agreement) (the "Redemption Amount") on the day written notice of redemption (the "Notice of Redemption") is given to the Holder. The Notice of Redemption shall specify the date for such Optional Redemption (the "Redemption Payment Date"), which date shall be not less than five (5) business days after the date of the Notice of Redemption (the "Redemption Period"). A Notice of Redemption shall not be effective with respect to any portion of this Note for which the Holder has a pending election to convert, or for Conversion Notices given by the Holder prior to the Redemption Payment Date. On the Redemption Payment Date, the Redemption Amount shall be paid in good funds to the Holder. In the event the Borrower fails to pay the Redemption Amount on the Redemption Payment Date as set forth herein, then (i) such Notice of Redemption will be null and void, (ii) Borrower will have no further right to deliver another Notice of Redemption, and (iii) Borrower’s failure may be deemed by Holder to be a non-curable Event of Default. The funds for such redemption may not come from a third party financing or other financing provided by the holder and may not result in the subsequent assignment of this debt.

           2.8           Mandatory Redemption at Holder’s Election.  In the event the Company is prohibited from issuing Conversion Shares, or fails to timely deliver Shares on a Delivery Date, or upon the occurrence of any other Event of Default (as defined in this Note or in the Purchase Agreement) or for any reason other than pursuant to the limitations set forth in Section 2.3 hereof, then at the Holder's election, the Company must pay to the Holder ten (10) business days after request by the Holder, at the Holder's election, a sum of money in immediately available terms equal to the greater of (i) the product of the outstanding principal amount of the Note designated by the Holder multiplied by 150%, or (ii) the product of the number of Conversion Shares otherwise deliverable upon conversion of an amount of Note principal and/or interest designated by the Holder (with the date of giving of such designation being a “Deemed Conversion Date”) at the then Conversion Price that would be in effect on the Deemed Conversion Date multiplied by the average of the closing bid prices for the Common Stock for the five consecutive trading days preceding either: (1) the date the Company becomes obligated to pay the Mandatory Redemption Payment, or (2) the date on which the Mandatory Redemption Payment is made in full, whichever is greater, together with accrued but unpaid interest thereon and any liquidated damages then payable (“Mandatory Redemption Payment”).  The Mandatory Redemption Payment must be received by the Holder on the same date as the Company Shares otherwise deliverable or within ten (10) business days after request, whichever is sooner (“Mandatory Redemption Payment Date”).  Upon receipt of the Mandatory Redemption Payment, the corresponding Note principal and interest will be deemed paid and no longer outstanding. Liquidated damages calculated pursuant to Section 2.5(c) hereof, that have been paid or accrued for the twenty (20) day period prior to the actual receipt of the Mandatory Redemption Payment by the Holder shall be credited against the Mandatory Redemption Payment.

           2.9           Buy-In.  In addition to any other rights available to the Holder, but without any duplicative recovery by the Holder, if the Company fails to deliver to the Holder the Conversion Shares issuable upon conversion of this Note by the Delivery Date and if after five (5) business days after the Delivery Date the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Common Stock which the Holder was entitled to receive upon such conversion (a “Buy-In”), then the Company shall pay in cash to the Holder (in addition to any remedies available to or elected by the Holder) the amount by which (A) the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate principal and/or interest amount of the Note for which such conversion was not timely honored, together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty).  For example, if the Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of $10,000 of note principal and/or interest, the Company shall be required to pay the Holder $1,000, plus interest.  The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In.

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2.10           Reservation. During the period the conversion right exists, Borrower will reserve and instruct its Transfer Agent to reserve from its authorized and unissued Common Stock a number of shares of Common Stock equal to 150% of the amount of Common Stock issuable upon the full conversion of this Note. Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

2.11           Maximum Conversion

(a) Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon conversion of this Note (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934 Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. By written notice to the Company, a Holder may waive the provisions of this Section 2.3(a) as to itself but any such waiver will not be effective until the 61st day after delivery thereof and such waiver shall have no effect on any other Holder.

(b)           Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon conversion of this Note (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934 Act, does not exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. This provision may not be waived.

2.12           Short sales.  The Holder shall not sell short the common shares of the Company without first having sent a conversion request to the Company or having such shares available to cover such short sale prior to entering into such short sale.

ARTICLE III

EVENTS OF DEFAULT

An “Event of  Default,”  wherever  used  herein, means any one of the following events  (whatever  the reason and whether it shall be voluntary  or involuntary or effected by operation of law or pursuant to any judgment,  decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

3.1           Failure to Pay Principal or Interest. The Borrower fails to pay any installment of Principal, Interest or other sum due under this Note when due and payable.

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3.2           Breach of Covenant. The Borrower breaches any other covenant or other term or condition of the Purchase Agreement or this Note (including, without limitation, the use of proceeds from this Note in breach of Section 1.6 of this Note) in any material respect and such breach, if subject to cure, continues for a period of ten (10) business days after written notice to the Borrower from the Holder.

3.3           Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein, in the Purchase Agreement, or in any agreement, statement or certificate given in writing pursuant hereto or in connection therewith shall be false or misleading in any material respect as of the date made and the Closing Date.

3.4           Receiver or Trustee. The Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed.

3.5           Judgments. Any money judgment, writ or similar final process shall be entered or filed against Borrower or any of its property or other assets for more than $1,000,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days.

3.6           Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted by or against the Borrower and if instituted against Borrower are not dismissed within thirty (60) days of initiation.

3.7           Non-Payment.  A default by the Borrower under any one or more obligations in an aggregate monetary amount in excess of $200,000 for more than forty-five (45) days after the due date. Any obligations in default prior to December 15th, 2013 are not an “Event of Default” under this agreement.

3.8           Stop Trade. An SEC or judicial stop trade order or trading suspension on any trading market on which such Common Stock may be listed or quoted, that lasts for five or more consecutive trading days.

3.9           Failure to Deliver Common Stock or Replacement Note. Borrower's failure to timely deliver Common Stock to the Holder pursuant to and in the time required by this Note.

               3.10           Failure to Maintain Current Public Information. The Company’s failure to maintain current public information as defined in Rule 144 of the Securities Act of 1933 or failure to timely file its reports as required by Securities Exchange Act of 1934.

3.11         Reverse Splits.  The Borrower effectuates a reverse split of its Common Stock without the prior written consent of the Holder.

3.12         Reservation Default.  Failure by the Borrower to have reserve for issuance upon conversion of the Note the amount of Common stock as set forth in the Purchase Agreement.

3.13         Cross Default. A default by the Borrower of a material term, covenant, warranty or undertaking of any other agreement to which the Borrower and Holder are parties.

3.14         Change in Control. A change in control of the Company without at least fourteen (14) days prior written notice to Holder. A change in control shall mean that more than 30% of the shares of common stock are consolidated in one person or entity so that the person or entity(other than any one or more of the Holders) may control the election of the board of directors or the passage of a proposal that would normally require a shareholder vote without such shareholder vote and that such person or entity was not a holder of shares of the Company at the date of execution hereof.

3.15         Asset Sales.  Any instance, undertaken without written consent  of the Holder, whereby the Company or any of its subsidiaries, sells, transfers, leases or otherwise disposes (including pursuant to a merger) of substantially all of the Company’s assets, including any asset constituting an equity interest in any other person, except sales, transfers, leases and other dispositions of inventory, used, obsolete or surplus equipment or other property, in each case in the ordinary course of the Company’s business and consistent with past practice.

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3.16     Delisting.  Delisting of the Common Stock from on any trading market on which such Common Stock may be listed or quoted.

During the time that any portion of this Note is outstanding,  if any Event of Default has occurred,  the remaining principal amount of this Note, together with interest and other amounts owing in respect   hereof,  to the date of  acceleration  shall become, at the  Holder's  election,  immediately  due and payable in cash,  provided  however,  the Holder may request  (but shall have no obligation  to request)  payment of such amounts in Common Stock of the Borrower. In addition to any other remedies,  the Holder shall have the right (but not the obligation)  to convert this Note at any time after (x) an Event of Default or (y) the Maturity Date at the Conversion Price then in effect. For an Event of Default to be deemed to have occurred, the Holder must provide written notice notifying the Holder when an Event of Default occurs or at the Maturity Date of the Note. Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder. No such rescission or annulment  shall affect any subsequent  Event of Default or impair any right  consequent  thereon.  Upon an Event of Default,  notwithstanding  any other provision of this Note or any Transaction Document,  the Holder shall have no obligation to comply with or adhere to any  limitations,  if any, on the conversion of this Note or the sale of the Conversion Shares, Shares or Other Securities.

ARTICLE IV

MISCELLANEOUS

4.1           Failure or Indulgence Not Waiver. No failure or delay on the part of Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

                4.2           Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Borrower to:Thinspace Technology, Inc., 5535 S. Williamson Blvd., Unit 751, Port Orange, FL 32128, telecopier number: 954-756-8043 and (ii) if to the Holder, to Greystone Capital Partners, Inc., 1170 Kane Concourse, #404, Bay Harbor Islands, FL 33154.

4.3           Amendment Provision. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4           Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns.

4.5           Cost of Collection. If default is made in the payment of this Note, Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys' fees.

4.6           Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Delaware. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located in the state of Florida located in Broward County, Florida. Both parties and the individual signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.

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4.7           Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

4.8           Waiver of Jury Trial.  THE PARTIES HEREBY  KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY WAIVE  THE  RIGHT  ANY OF THEM  MAY HAVE TO A TRIAL  BY JURY IN  RESPECT  OF ANY LITIGATION  BASED  HEREON OR ARISING OUT OF,  UNDER OR IN  CONNECTION  WITH THIS AGREEMENT  OR ANY  TRANSACTION  DOCUMENT  OR ANY  COURSE OF  CONDUCT,  COURSE OF DEALING,  STATEMENTS  (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  THIS PROVISION  IS  A  MATERIAL  INDUCEMENT  FOR  THE  PARTIES'  ACCEPTANCE  OF  THIS AGREEMENT.

4.9           Redemption. This Note may not be redeemed or paid without the consent of the Holder except as described in this Note or in the Purchase Agreement.

4.10         Shareholder Status. The Holder shall not have rights as a shareholder of the Borrower with respect to unconverted portions of this Note. However, the Holder will have all the rights of a shareholder of the Borrower with respect to the shares of Common Stock to be received by Holder after delivery by the Holder of a Conversion Notice to the Borrower.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOLLOWS]

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         IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the 26th day of March, 2014.

THINSPACE TECHNOLOGY, INC.
By:	/s/ Robert Zysblat
	Name: Robert Zysblat
	Title: President

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Exhibit A

NOTICE OF CONVERSION

(To be executed by the Holder in order to Convert the Note originally issued March 26, 2014)

TO:

The undersigned hereby irrevocably elects to convert $_________________ of the  principal  amount of the above  Note  into  Shares of Common  Stock of ________________________.,  according to the conditions  stated therein,  as of the Conversion Date written below.

Conversion Date:
Applicable Conversion Price:
Signature:
Name:
Amount to be converted:	$
Aunt of Note unconverted:	$
Conversion Price per share:	$
Number of shares to be issued:
Amount of Interest Converted:	$
Conversion Price per share:	$
Number of Interest shares of to be issued:
Total Number of shares of to be issued:
Issue to:
Broker DTC Participant Code:
Account Number:

If to be issued in Certificate form, send to:

____________________________________

____________________________________

____________________________________

____________________________________

Exhibit B

USE OF PROCEEDS

EX-10.12

Exhibit 10.12

SECURITIES PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (“Agreement”) is made as of the ____day of ________, 2014 by and between THINSPACE TECHNOLOGY, INC., a Delaware corporation (the “Company”), and the Investor set forth on the signature page affixed hereto (the “Investor”).

Recitals

A.           The Company and the Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Regulation D (“Regulation D”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended; and

B.           The Investor wishes to purchase from the Company, and the Company wishes to sell and issue to the Investor, upon the terms and conditions stated in this Agreement, a $__________ principal amount of 8% convertible debenture, in the form attached hereto as Exhibit A (the “Debenture”).

In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.         Definitions.  In addition to those terms defined above and elsewhere in this Agreement, for the purposes of this Agreement, the following terms shall have the meanings set forth below:

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by, or is under common control with, such Person.

“Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company, after due inquiry.

“Confidential Information” means trade secrets, confidential information and know-how (including but not limited to ideas, formulae, compositions, processes, procedures and techniques, research and development information, computer program code, performance specifications, support documentation, drawings, specifications, designs, business and marketing plans, and customer and supplier lists and related information).

“Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Intellectual Property” means all of the following: (i) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (iii) copyrights and copyrightable works; (iv) registrations, applications and renewals for any of the foregoing; and (v) proprietary computer software (including but not limited to data, data bases and documentation).

“Irrevocable Transfer Agent Instructions” means the instruction letter, dated as of ____________, 2014, by and between the Company and Signature Stock Transfer, Inc., in the form attached hereto as Exhibit C.

“Material Adverse Effect” means a material adverse effect on (i) the assets, liabilities, results of operations, condition (financial or otherwise), business, or prospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its obligations under the Transaction Documents.

“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

“Purchase Price” means ______________________ Dollars ($__________).

“SEC Filings” has the meaning set forth in Section 4.6.

“SEC” means the United States Securities and Exchange Commission.

“Securities” means the Debentures and the Shares.

“Shares” means the shares of Common Stock issuable upon conversion of the Debenture.

“Subsidiary” of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.

“Transaction Documents” means this Agreement, the Debenture and the Irrevocable Transfer Agent Instructions.

“1933 Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“1934 Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

2.           Purchase and Sale of the Debenture.  Subject to the terms and conditions of this Agreement, on the Closing Date, the Company shall sell and issue to the Investor, a Debenture in the principal amount of $____________ in exchange for $__________.

3.           Closing.  Upon confirmation that the other conditions to closing specified herein have been satisfied or duly waived by the Investor, the Company shall deliver to the Investor, a Debenture registered the name of the Investor, and the Investor shall cause a wire transfer in same day funds to be sent to the account of the Company as instructed in writing by the Company, in an amount representing the Purchase Price for the Debenture (the “Closing Date”). The closing of the purchase and sale of the Debenture shall take place at the offices of Thinspace Technology, Inc. 5535 S. Williamson Blvd., Unit 751, Port Orange, FL 32128, or at such other location and on such other date as the Company and the Investor shall mutually agree.

4.           Representations and Warranties of the Company.  The Company hereby represents and warrants to the Investor that, except as set forth in the schedules delivered herewith (collectively, the “Disclosure Schedules”):

4. 1           Organization, Good Standing and Qualification.  Each of the Company and its Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted and to own its properties.  Each of the Company and its Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property makes such qualification or leasing necessary unless the failure to so qualify has not and could not reasonably be expected to have a Material Adverse Effect.  The Company’s Subsidiaries are listed on Schedule 4.1 hereto.

4.2           Authorization.  The Company has full power and authority and, has taken all requisite action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Transaction Documents, (ii) authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Securities.  The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

4.3           Capitalization.  Schedule 4.3 sets forth (a) the authorized capital stock of the Company on the date hereof; (b) the number of shares of capital stock issued and outstanding; (c) the number of shares of capital stock issuable pursuant to the Company’s stock plans; and (d) the number of shares of capital stock issuable and reserved for issuance pursuant to securities (other than the Securities) exercisable for, or convertible into or exchangeable for any shares of capital stock of the Company.  All of the issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights.  Except as described on Schedule 4.3, all of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights, were issued in full compliance with applicable state and federal securities law and any rights of third parties and are owned by the Company, beneficially and of record, subject to no lien, encumbrance or other adverse claim.  Except as described on Schedule 4.3, no Person is entitled to pre-emptive or similar statutory or contractual rights with respect to any securities of the Company.  Except as described on Schedule 4.3, there are no outstanding warrants, options, convertible securities or other rights, agreements or arrangements of any character under which the Company or any of its Subsidiaries is or may be obligated to issue any equity securities of any kind and except as contemplated by this Agreement, neither the Company nor any of its Subsidiaries is currently in negotiations for the issuance of any equity securities of any kind.

Except as described on Schedule 4.3, the issuance and sale of the Securities hereunder will not obligate the Company to issue shares of Common Stock or other securities to any other Person (other than the Investor) and will not result in the adjustment of the exercise, conversion, exchange or reset price of any outstanding security.

Except as described on Schedule 4.3, the Company does not have outstanding stockholder purchase rights or “poison pill” or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain events.

4.4           Valid Issuance.  The Debenture has been duly and validly authorized and, when issued and paid for pursuant to this Agreement, shall be free and clear of all encumbrances and restrictions (other than those created by the Investor), except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws.  Upon the due conversion of the Debenture, the Shares will be validly issued, fully paid and non-assessable free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Investor.  The Company shall reserve a sufficient number of shares of Common Stock for issuance upon the exercise of the Debenture, free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Investor.

4.5           Consents.  The execution, delivery and performance by the Company of the Transaction Documents, and the offer, issuance and sale of the Securities require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than filings that have been made pursuant to applicable state securities laws, and post-sale filings pursuant to applicable state and federal securities laws which the Company undertakes to file within the applicable time periods.  Subject to the accuracy of the representations and warranties of the Investor set forth in Section 5 hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Securities, (ii) the issuance of the Shares upon due conversion of the Debenture, and (iii) the other transactions contemplated by the Transaction Documents from the provisions of any shareholder rights plan or other “poison pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties may be subject and any provision of the Company’s Articles of Incorporation or By-laws that is or could reasonably be expected to become applicable to the Investor as a result of the transactions contemplated hereby, including without limitation, the issuance of the Securities and the ownership, disposition or voting of the Securities by the Investor or the exercise of any right granted to the Investor pursuant to this Agreement or the other Transaction Documents.

4.6           Delivery of SEC Filings; Business.  The Company has made available to the Investor through the EDGAR system, true and complete copies of the Company’s most recent Annual Report on Form 10-K for its last fiscal year (the “10-K”), and all other reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to the date hereof (collectively, the “SEC Filings”).  The SEC Filings are the only filings required of the Company pursuant to the 1934 Act for such period.  The Company and its Subsidiaries are engaged in all material respects only in the business described in the SEC Filings and the SEC Filings contain a complete and accurate description in all material respects of the business of the Company and its Subsidiaries, taken as a whole.

4.7           Use of Proceeds.  The net proceeds of the sale of the Debenture hereunder shall be used by the Company for working capital and general corporate purposes.

4.8           No Conflict, Breach, Violation or Default.  The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Securities will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Articles of Incorporation or the Company’s Bylaws, both as in effect on the date hereof (true and complete copies of which have been made available to the Investor through the EDGAR system), or (ii)(a) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company, any Subsidiary or any of their respective assets or properties, or (b) any agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or a Subsidiary is bound or to which any of their respective assets or properties is subject.

4.9           Brokers and Finders.  No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company.

4.10           No Directed Selling Efforts or General Solicitation.  Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Securities.

4.11           No Integrated Offering.  Neither the Company nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely affect reliance by the Company on Section 4(2) for the exemption from registration for the transactions contemplated hereby or would require registration of the Securities under the 1933 Act.

4.12           Private Placement.  The offer and sale of the Securities to the Investor as contemplated hereby is exempt from the registration requirements of the 1933 Act.

5.           Representations and Warranties of the Investor.  The Investor hereby represents and warrants to the Company that:

5.1           Organization and Existence.  Such Investor is a validly existing corporation, limited partnership or limited liability company and has all requisite corporate, partnership or limited liability company power and authority to invest in the Securities pursuant to this Agreement.

5.2           Authorization.  The execution, delivery and performance by such Investor of the Transaction Documents to which such Investor is a party have been duly authorized and will each constitute the valid and legally binding obligation of such Investor, enforceable against such Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

5.3           Purchase Entirely for Own Account.  The Securities to be received by such Investor hereunder will be acquired for such Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws.  Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period of time.  Such Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require it to be so registered.

5.4           Investment Experience.  Such Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

5.5           Disclosure of Information.  Such Investor has had an opportunity to receive all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Securities.  Such Investor acknowledges receipt of copies of the SEC Filings.  Neither such inquiries nor any other due diligence investigation conducted by such Investor shall modify, amend or affect such Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.

5.6           Restricted Securities.  Such Investor understands that the Securities are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances.

5.7           Legends.  It is understood that, except as provided below, certificates evidencing the Securities may bear the following or any similar legend:

(a)           “The securities represented hereby may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to Rule 144(i), or (iii) the Company has received an opinion of counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933 or qualification under applicable state securities laws.”

(b)           If required by the authorities of any state in connection with the issuance of sale of the Securities, the legend required by such state authority.

5.8           Accredited Investor.  Such Investor is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.

5.9           No General Solicitation.  Such Investor did not learn of the investment in the Securities as a result of any public advertising or general solicitation.

5.10           Brokers and Finders.  No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of such Investor.

6.  Conditions to Closing.

6.1           Conditions to the Investor’s Obligations. The obligation of the Investor to purchase the Debenture at Closing is subject to the fulfillment to such Investor’s satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by the Investor:

(a)           The representations and warranties made by the Company in Section 4 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date, and, the representations and warranties made by the Company in Section 4 hereof not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date.  The Company shall have performed in all material respects all obligations and conditions herein required to be performed or observed by it on or prior to the Closing Date.

(b)           The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the purchase and sale of the Securities, and the consummation of the other transactions contemplated by the Transaction Documents, all of which shall be in full force and effect.

(c)           No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.

(d)           The Company shall have executed and delivered the Irrevocable Transfer Agent Instructions (including the same executed by Olde Monmouth Signature Stock Transfer, Inc.).

(e)           No stop order or suspension of trading shall have been imposed by Nasdaq, the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.

6.2           Conditions to Obligations of the Company. The Company's obligation to sell and issue the Debenture at Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

(a)           The representations and warranties made by the Investor in Section 5 hereof, other than the representations and warranties contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (the “Investment Representations”), shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date.  The Investment Representations shall be true and correct in all respects when made, and shall be true and correct in all respects on the Closing Date with the same force and effect as if they had been made on and as of said date.  The Investor shall have performed in all material respects all obligations and conditions herein required to be performed or observed by them on or prior to the Closing Date.

(b)           The Investor shall have delivered the Purchase Price to the Company.

6.3           Termination of Obligations to Effect Closing; Effects.

(a)           The obligations of the Company, on the one hand, and the Investor, on the other hand, to effect the Closing shall terminate as follows:

(i)           Upon the mutual written consent of the Company and the Investor;

(ii)           By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company;

(iii)           By the Investor if any of the conditions set forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by the Investor; or

(iv)           By either the Company or the Investor if the Closing has not occurred on or prior to ____________, 2014; provided, however, that, except in the case of clause (i) above, the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction Documents if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect the Closing.

7.           Survival and Indemnification.

7.1  Survival.  The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement.

7.2  Indemnification.  The Company agrees to indemnify and hold harmless each Investor and its Affiliates and their respective directors, officers, employees and agents from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorney fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to be performed on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are incurred by such Person.

7.3  Conduct of Indemnification Proceedings.  Promptly after receipt by any Person (the “Indemnified Person”) of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to Section 7.2, such Indemnified Person shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses; provided, however,that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is materially prejudiced by such failure to notify.  In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; or (ii) in the reasonable judgment of counsel to such Indemnified Person representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  The Company shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Company shall indemnify and hold harmless such Indemnified Person from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment.  Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, the Company shall not effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding.

8.           Miscellaneous.

8.1           Successors and Assigns.  This Agreement may not be assigned by a party hereto without the prior written consent of the Company or the Investor, as applicable, provided, however, that an Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or to a third party acquiring some or all of its Securities in a private transaction without the prior written consent of the Company, after notice duly given by such Investor to the Company.  The provisions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.2           Counterparts; Faxes.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement may also be executed via facsimile, which shall be deemed an original.

8.3           Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.4           Notices.  Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by telex or telecopier, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier.  All notices shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten days’ advance written notice to the other party:

If to the Company:

THINSPACE TECHNOLOGY, INC.

5535 S. Williamson Blvd., Unit 751

Port Orange, FL 32128

Attn:  President

Fax: 786-763-3830

If to the Investor:

8.5           Expenses.  The parties hereto shall pay their own costs and expenses in connection herewith.  In the event that legal proceedings are commenced by any party to this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction Documents, the party or parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the prevailing party in such proceedings.

8.6           Amendments and Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.  Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Securities purchased under this Agreement at the time outstanding, each future holder of all such Securities, and the Company.

8.7           Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

8.8           Entire Agreement.  This Agreement, including the Exhibits and the Disclosure Schedules, and the other Transaction Documents constitute the entire agreement among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.

8.9           Further Assurances.  The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

8.10           Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to principles of conflicts of law.  THE COMPANY AND INVESTOR WAIVE ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS DEBENTURE OR ANY TRANSACTION CONTEMPLATED HEREIN, INCLUDING CLAIMS BASED ON CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER COMMON LAW OR STATUTORY BASIS. Each party hereby submits to the exclusive jurisdiction of the state and federal courts located in the County of New York, State of New York.  If the jury waiver set forth in this Section is not enforceable, then any dispute, controversy or claim arising out of or relating to this Agreement or any of the transactions contemplated herein will be finally settled by binding arbitration in New York, New York in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules.  The arbitrator shall apply New York law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory arbitration.  Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph.  The expenses of the arbitration, including the arbitrator’s fees and expert witness fees, incurred by the parties to the arbitration, may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned between the parties in any manner deemed appropriate by the arbitrator.  Unless and until the arbitrator decides that one party is to pay for all (or a share) of such expenses, both parties shall share equally in the payment of the arbitrator’s fees as and when billed by the arbitrator.

[signature page follows]

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

The Company:

THINSPACE TECHNOLOGY, INC.
	By:
	Name  Robert Zysblat
	Title    President & Chairman

The Investor: 

Date
	By:
	Name
	Title

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Robert Zysblat, certify that:

1.    I have reviewed this report on Form 10-K of ThinSpace Technology, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Dated:  March 31, 2014	By:	/s/ Robert Zysblat
		Robert Zysblat
		President  (principal executive and financial officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Owen Dukes, certify that:

1.    I have reviewed this report on Form 10-K of ThinSpace Technology, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Dated:  March 31, 2014	By:	/s/ Owen Dukes
		Owen Dukes
		Chief Executive Officer (principal executive officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER

 PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Transition Report of Thinspace Technology, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert Zysblat, President of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

  (2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 31, 2014	By:	/s/ Robert Zysblat
		Robert Zysblat
		President  (principal executive and financial officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

 PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Transition Report of Thinspace Technology, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Owen Dukes, Chief Executive Officer  of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

  (2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 31, 2014	By:	/s/ Owen Dukes
		Owen Dukes
		Chief Executive Officer  (principal executive officer)

XML

Intangible Assets (Detail Textual) (USD $)	11 Months Ended	12 Months Ended
	Dec. 31, 2013	Jan. 31, 2013
Intangible Assets [Abstract]
Amortization expense	$ 61,464	$ 62,550

XML

Provision for Income Taxes (Details Textual) (USD $)	12 Months Ended	11 Months Ended
	Jan. 31, 2013	Dec. 31, 2013 Domestic Tax Authority [Member]	Jan. 31, 2013 Domestic Tax Authority [Member]	Dec. 31, 2013 Foreign Tax Authority [Member]	Jan. 31, 2013 Foreign Tax Authority [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards		$ 529,000	$ 0	$ 651,000	$ 455,000
Operating loss carryforwards, expiration date		Jan. 01, 2033
Net federal benefit percent	6.00%

XML

Stockholders' Equity (Detail Textual) (USD $)	1 Months Ended	11 Months Ended
	Jan. 30, 2014	Dec. 31, 2013	Jan. 31, 2013
Class of Stock [Line Items]
Preferred stock, shares authorized		50,000,000
Preferred stock, par value (in dollars per share)		$ 0.001
Derivative liability of conversion feature of preferred stock		$ 2,363,797
Series B convertible preferred stock
Class of Stock [Line Items]
Preferred stock, shares authorized		75,000	75,000
Preferred stock, par value (in dollars per share)		$ 1.00	$ 0.001
Percentage of convertible preferred stock		10.00%
Preferred stock, shares issued		75,000
Preferred stock, shares outstanding		75,000
Conversion price		$ 0.60
Common stock issued upon conversion of convertible preferred stock		125,000
Series C convertible preferred stock
Class of Stock [Line Items]
Preferred stock, shares authorized		672,000	672,000
Preferred stock, par value (in dollars per share)		$ 0.001	$ 0.001
Preferred stock, shares issued		672,000
Preferred stock, shares outstanding		672,000
Convertible preferred stock, Description		Each holder of Series C Preferred Stock shall have the right to convert all (but not part) of such holder's shares of Series C Convertible Preferred Stock such that each share of Series C Convertible Preferred Stock shall convert into that number of fully paid and non-assessable shares of Common Stock equal to the of the number of preferred shares divided by the lowest closing bid price during the twenty trading days prior to the notice of conversion multiplied by .25 (one-fourth).
Number of shares sold		672,000
Proceeds received from sale of stock	$ 472,000	$ 200,000

XML

Commitments and Contingencies (Details) (USD $)	11 Months Ended	12 Months Ended
	Dec. 31, 2013	Jan. 31, 2013
Commitments and Contingencies [Abstract]
Short term lease on office space, expiration date	Dec. 31, 2014
Rent expense	$ 153,507	$ 53,723

XML

Deferred Revenue (Details) (USD $)	Dec. 31, 2013	Jan. 31, 2013
Summary of deferred revenue balance
Deferred revenue due within one year	$ 1,482,504	$ 511,061
Deferred revenue due after one year	73,897	25,740
Carrying value	$ 1,556,401	$ 536,801

XML

Summary of Significant Accounting Policies (Details) (Fair Value, Measurements, Recurring, USD $)	Dec. 31, 2013
Level 1
Liabilities
Conversion and warrant derivative liabilities
Total Liabilities
Level 2
Liabilities
Conversion and warrant derivative liabilities
Total Liabilities
Level 3
Liabilities
Conversion and warrant derivative liabilities	11,268,087
Total Liabilities	11,268,087
Total
Liabilities
Conversion and warrant derivative liabilities	11,268,087
Total Liabilities	$ 11,268,087

XML

Subsequent Events (Detail Textuals 1) (Subsequent Event [Member], USD $)	1 Months Ended
	Mar. 21, 2014 IBC Funds, LLC (IBC) [Member]	Feb. 21, 2014 IBC Funds, LLC (IBC) [Member]	Mar. 21, 2014 Greystone Capital Partners, Inc. [Member]	Mar. 26, 2014 Greystone Capital Partners, Inc. [Member]
Subsequent Event [Line Items]
Annual interest rate on convertible debentures	8.00%	8.00%	8.00%	8.00%
Principal amount of 8% Debentures	$ 50,000	$ 150,000	$ 50,000	$ 50,000
Debt instrument, conversion price per share , description	the Conversion Price per share at 25% of the lowest closing bid price as of 4 pm (New York Time) for the Company's stock during the previous 20 trading days (the "Conversion Price").	the Conversion Price per share at 25% of the lowest closing bid price as of 4 pm (New York Time) for the Company's stock during the previous 20 trading days (the "Conversion Price").	the Conversion Price per share at 25% of the lowest closing bid price as of 4 pm (New York Time) for the Company's stock during the previous 20 trading days (the "Conversion Price").	the Conversion Price per share at 25% of the lowest closing bid price as of 4 pm (New York Time) for the Company's stock during the previous 20 trading days (the "Conversion Price").
Percentage of discount of the average of the closing bid price of common stock	25.00%	25.00%	25.00%	25.00%
Number of trading days of conversion	20 days	20 days	20 days	20 days

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Property and Equipment (Tables)

11 Months Ended

Dec. 31, 2013

Property and Equipment [Abstract]

Summary of property and equipment

	December 31,			January 31,
	2013			2013
Office equipment and furniture	$	91,637		$	51,950
Accumulated depreciation		(60,312	)		(44,297	)
Carrying value	$	31,325		$	7,653

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Stockholders' Equity (Detail Textual 2)	11 Months Ended
	Dec. 31, 2013
Stockholders' Equity [Abstract]
Number of common stock purchase warrants outstanding	4,306,932
Number of common stock purchase warrants exercisable	4,306,932
Warrants exercise price	0.0625
Warrant expiration	Between April 5, 2014 and November 10, 2014
Warrants, weighted average contractual life (Years)	6 months 11 days

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Convertible Notes Payable (Details) (USD $)			11 Months Ended			11 Months Ended
	Dec. 31, 2013	Jan. 31, 2013	Dec. 31, 2013 Convertible debentures IBC Funds, LLC (IBC) [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Promissorynotes	Dec. 31, 2013 Convertible Notes Payable [Member] Sixteen convertible notes [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Sixteen convertible notes [Member] Minimum [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Sixteen convertible notes [Member] Maximum [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Two convertible notes [Member]
Debt Instrument [Line Items]
Number of convertible notes				18
Principal amount			$ 100,000	$ 1,173,825	$ 1,073,825			$ 100,000
Accrued and unpaid interest				209,972
Percentage of discounts to market price of common stock			75.00%			75.00%	90.00%
Common stock, par value	$ 0.001	$ 0.001	$ 0.001
Conversion price per share								$ 0.001
Debt discount	311,806		100,000	311,806
Weighted average interest rate				9.00%
Maturity date			Dec. 31, 2016	Dec. 31, 2016
Interest rate			8.00%
Number of trading days of conversion			20 days
Conversion feature liability			399,964
Fair value assumptions, method used			Black-Scholes method
Fair value assumptions, risk free interest rate			0.625%
Fair value assumptions, dividend yield			0.00%
Fair value assumptions, expected volatility rate			432.00%
Fair value assumptions, expected life (in years)			3 years
Debt issuing expense			$ 299,964

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Property and Equipment (Detail Textual) (USD $)	11 Months Ended	12 Months Ended
	Dec. 31, 2013	Jan. 31, 2013
Property and Equipment [Abstract]
Depreciation	$ 13,602	$ 4,672

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Provision for Income Taxes (Details 1)	11 Months Ended	12 Months Ended
	Dec. 31, 2013	Jan. 31, 2013
Summary of provision for income taxes differs from amount of income tax determined
Statutory federal income tax rate	(34.00%)	(34.00%)
Statutory state and local income tax rate (6%), net of federal benefit	(4.00%)	(4.00%)
Foreign tax rate differentials	4.50%	10.00%
Derivative liabilities adjustments	7.60%
Change in valuation allowance	25.90%	28.00%
Effective tax rate	0.00%	0.00%

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Related Party Transactions (Details) (USD $)	11 Months Ended	12 Months Ended
	Dec. 31, 2013	Jan. 31, 2013
Related Party Transactions [Abstract]
Fees incurred from related party transaction	$ 277,940	$ 144,480

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Property and Equipment

11 Months Ended

Dec. 31, 2013

Property and Equipment [Abstract]

PROPERTY AND EQUIPMENT

NOTE 3 – PROPERTY AND EQUIPMENT

 Property and equipment consists of the following:

	December 31,			January 31,
	2013			2013
Office equipment and furniture	$	91,637		$	51,950
Accumulated depreciation		(60,312	)		(44,297	)
Carrying value	$	31,325		$	7,653

Depreciation expense for the eleven months ended December 31, 2013 and the year ended January 31, 2013 was $13,602 and $4,672, respectively.

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Loans Payable (Details) (USD $)	Dec. 31, 2013	Jan. 31, 2013
Summary of loans payable
Bank loan payable	$ 40,066	$ 51,476
Demand loans payable	60,000
Loans payable,Total	100,066	51,476
Current portion	(74,800)	(13,856)
Long term portion	$ 25,266	$ 37,620

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Provision for Income Taxes (Tables)

11 Months Ended

Dec. 31, 2013

Provision for Income Taxes [Abstract]

Summary of income tax provision (benefit)

	December 31, 2013			January 31, 2013
Federal:
Current	$	-		$	-
Deferred		368,000			44,000
		368,000			44,000
State and local:
Current		-			-
Deferred		21,000			-
		21,000			-
Change in valuation allowance		(389,000	)		(44,000	)
Income tax provision (benefit)	$	-		$	-

Summary of provision for income taxes differ from amount of income tax determined

	December 31, 2013			January 31, 2013
Statutory federal income tax rate		(34.0	%)		(34.0	%)
Statutory state and local income tax rate (6%), net of federal benefit		(4.0	%)		(4.0	%)
Foreign tax rate differentials		4.5	%		10.0	%
Derivative liabilities adjustments		7.6	%		-
Change in valuation allowance		25.9	%		28.0	%
Effective tax rate		0.00	%		0.00	%

Componennts of deferred tax asset and liabilities

	December 31,				January 31,
	2013				2013
Deferred tax assets:
Net operating loss carry forward		$	516,000			$	127,000
Less:  valuation allowance			(516,000	)			(127,000	)
Net deferred tax asset		$	-			$	-

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Deferred Revenue (Tables)

11 Months Ended

Dec. 31, 2013

Deferred Revenue [Abstract]

Summary of deferred revenue balance

	December 31,		January 31,
	2013		2013
Deferred revenue due within one year	$	1,482,504	$	511,061
Deferred revenue due after one year		73,897		25,740
Carrying value	$	1,556,401	$	536,801

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Subsequent Events(Detail Textuals) (Subsequent Event [Member], USD $)	1 Months Ended
	Feb. 28, 2014	Jan. 30, 2014
Subsequent Event [Member]
Subsequent Event [Line Items]
Strategic advisory services fee		$ 360,000
Common stock issued to consulting services as compensation		5,000,000
Term of consulting agreement		The term of the agreement covers the 2014 calendar year.
Common stock cancelled which was issued for consulting services as compensation		250,000
Common stock shares issued upon conversion notes and accrued interest	4,051,870
Principal debt being converted	191,184
Accrued interest converted into common stock	$ 11,409

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Loans Payable (Details Textual) (USD $)			11 Months Ended
	Dec. 31, 2013	Jan. 31, 2013	Dec. 31, 2013 Loans payable [Member]	Dec. 31, 2013 Notes payable [Member]	Dec. 31, 2013 Non-interest bearing loan [Member]
Short-term Debt [Line Items]
Interest rates on loans			2.20%	10.00%
Notes payable				$ 10,000
Maturity date			Dec. 31, 2016	Dec. 31, 2013
Loans payable	$ 100,066	$ 51,476			$ 50,000

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Organization and Line of Business (Details) (Retained subsequent [Member], USD $)	Dec. 31, 2013
Retained subsequent [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Cash	$ 9,848
Other assets	1,349
Accounts payable and accrued expenses	(1,032,603)
Notes payable	(922,019)
Derivative liabilities	(8,504,326)
Net liability retained	$ (10,447,751)

XML

Organization and Line of Business (Detail Textuals)	Dec. 31, 2013	Jan. 31, 2013
Organization and Line of Business [Abstract]
Common stock, shares issued	82,819,694	80,200,000
Common stock, shares outstanding	82,819,694	80,200,000

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Summary of Significant Accounting Policies

11 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Thinspace Technology, Inc. and its wholly-owned subsidiaries, Thinspace UK and Thinspace USA. All material inter-company accounts and transactions have been eliminated.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

For the purpose of the statements of cash flows, we consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

ACCOUNTS RECEIVABLE

Accounts receivable are reported at the customers' outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The Company evaluates receivables on a regular basis for potential reserve.The accounts receivable balances of $387,279 and $146,845 as of December 31, 2013 and January 31, 2013, respectively, do not included an allowance for doubtful accounts as the Company anticipates payment on all accounts within the next fiscal year. The Company routinely evaluates accounts receivable for uncollectible amounts.

REVENUE RECOGNITION

Certain volume licensing arrangements include a perpetual license for current products combined with rights to receive unspecified future versions of software products, which the Company has determined are additional software products and are therefore accounted for as subscriptions, with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period. Arrangements that include term based licenses for current products with the right to use unspecified future versions of the software during the coverage period are also accounted for as subscriptions, with revenue recognized ratably over the coverage period.

Revenue from cloud-based services arrangements that allow for the use of a hosted software product or service over a contractually determined period of time without taking possession of software are accounted for as subscriptions with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period beginning on the date the service is made available to customers.

Some volume licensing arrangements include time-based subscriptions for cloud-based services and software offerings that are accounted for as subscriptions. These arrangements are considered multiple element arrangements. However, because all elements are accounted for as subscriptions and have the same coverage period and delivery pattern, they have the same revenue recognition timing.

DEFERRED REVENUE

Deferred revenue related to support and maintenance is recorded in a manner consistent with the Company’s revenue recognition policy. The Company typically enters into one-year upgrade and maintenance contracts with its customers. The upgrade and maintenance contracts are generally paid in advance but can be billed monthly or quarterly. The Company defers such payment and recognizes revenue ratably over the contract period.

LONG-LIVED ASSETS

We assess the carrying value of long-lived assets in accordance with ASC 360, "Property, Plant and Equipment". We assess the impairment of identifiable intangibles and long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important that could trigger an impairment review include, but are not limited to, the following: a significant underperformance to expected historical or projected future operating results, a significant change in the manner of the use of the acquired asset or the strategy for the overall business, or a significant negative industry or economic trend.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to operations.

The Company depreciates its property and equipment on a straight-line basis with estimated useful lives of three to four years.

INTANGIBLE ASSETS

The intangible assets of the Company are subject to amortization and are amortized using the straight-line method over their estimated period of benefit of 10 years. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired.

INVENTORY

The Company values its inventory at the lower of cost (first-in, first-out) or market. The Company uses estimates and judgments regarding the valuation of inventory to properly value inventory. Inventory adjustments are made for the difference between the cost of the inventory and the estimated realizable value and charged to cost of goods sold in the period in which the facts that give rise to the adjustments become known.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Our short-term financial instruments, including cash, accounts receivable and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their terms.

Fair value measurements

ASC 820 “Fair Value Measurements and Disclosure” establishes a framework for measuring fair value and expands disclosure about fair value measurements. 

ASC 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes the following three levels of inputs that may be used:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  

In accordance with ASC 820, the following table represents the Company's fair value hierarchy for its financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2013:

	Level 1		Level 2		Level 3		Total
Liabilities
Conversion and warrant derivative liabilities		-		-		11,268,087		11,268,087
Total Liabilities	$	-	$	-	$	11,268,087	$	11,268,087

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (conversion and warrant derivative liabilities) for the eleven month period ended December 31, 2013.

	2013
Balance at beginning of year	$	-
Additions to derivative instruments		11,268,087
Change in fair value of warrant liability		-
Balance at end of period	$	11,268,087

The following is a description of the valuation methodologies used for these items:

Conversion derivative liability — these instruments consist of certain of our notes which are convertible based on a discount to the market value of our common stock. These instruments were valued using pricing models which incorporate the Company’s stock price, volatility, U.S. risk free rate, dividend rate and estimated life.

CONCENTRATIONS OF CREDIT RISK

The Company performs ongoing credit evaluations of its customers. At December 31, 2013, two customers accounted for 27% or more of accounts receivable. At January 31, 2013, one customer accounted for 38% or more of accounts receivable.

The Company maintains cash and cash equivalents with major financial institutions. Cash held in US bank accounts is insured up to $250,000 at each institution. Cash held in UK bank accounts is insured up to £85,000 at December 31, 2013 (approximately $140,000 at December 31, 2013) at each institution for each entity.  At times, cash balances may exceed the insured limits. The Company has not experienced any loss on these accounts.  The balances are maintained in demand accounts to minimize risk.

RESEARCH AND DEVELOPMENT

Expenses related to present and future products are expensed as incurred.

FOREIGN CURRENCY TRANSLATION

The financial statements of the Company’s U.K. subsidiary, Thinspace UK, are measured using the British Pound as the functional currency. Assets, liabilities and equity accounts of the company are translated at exchange rates as of the balance sheet date or historical acquisition date, depending on the nature of the account. Revenues and expenses are translated at average rates of exchange in effect throughout the year. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders' equity. The financial statements are presented in United States of America dollars.

LOSS PER SHARE

We use ASC 260, “Earnings Per Share” for calculating the basic and diluted income (loss) per share. We compute basic income (loss) per share by dividing net income (loss) and net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding.

Dilutive common stock equivalents consist of shares issuable upon conversion of debt and preferred stock and the exercise of our stock warrants. There were 165,140,070 common share equivalents at December 31, 2013 and none at January 31, 2013, which have been excluded from the computation of the weighted average diluted shares.

INCOME TAXES

We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.    

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance, which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax provisions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

The Company has made a comprehensive review of its portfolio of uncertain tax positions in accordance with recognition standards established by the guidance. As a result of this review, the Company concluded that at this time there are no uncertain tax positions that would result in tax liability to the Company.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” ("ASU No. 2013-02").  ASU No. 2013-02 provides updated guidance to improve the reporting of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to present, either on the face of the statement of income or in the notes, separately for each component of comprehensive income, the current period reclassifications out of accumulated other comprehensive income by the respective line items of net income affected by the reclassification. The updated guidance was effective prospectively for reporting periods beginning after December 15, 2012. The Company adopted the updated guidance effective February 1, 2013, and such adoption did not have any effect on the Company's results of operations, financial position or liquidity.

In July 2013, the FASB issued Accounting Standards Update No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" ("ASU No. 2013-11"). ASU No. 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with limited exceptions. ASU No. 2013-11 is effective for interim and annual periods beginning after December 15, 2013 and may be applied retrospectively. The adoption of the provisions of ASU No. 2013-11 is not expected to have a material impact on the company's financial position or results of operations.

In March 2013, the FASB issued Accounting Standards Update No. 2013-05, "Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity" ("ASU No. 2013-05"). ASU No. 2013-05 requires an entity that ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. ASU No. 2013-05 is effective for interim and annual periods beginning after December 15, 2013, with early adoption permitted and is to be applied prospectively. The adoption of the provisions of ASU No. 2013-05 is not expected to have a material impact on the company's financial position or results of operations.

Other recent accounting pronouncements issued by the FASB and the SEC did not, or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

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Organization and Line of Business (Detail Textuals 1) (USD $)	11 Months Ended	12 Months Ended
	Dec. 31, 2013	Jan. 31, 2013	Jan. 31, 2012
Organization and Line of Business [Abstract]
Net loss	$ (1,499,098)	$ (158,393)
Stockholders' deficit	14,044,350	455,376	297,531
Negative working capital	$ 13,312,285

XML

Inventory (Details) (USD $)	11 Months Ended
	Dec. 31, 2013
Inventory [Abstract]
Contribution of inventory by related party	$ 97,038

XML

Provision for Income Taxes (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Jan. 31, 2013
Deferred tax assets:
Net operating loss carry forward	$ 516,000	$ 127,000
Less: valuation allowance	(516,000)	(127,000)
Net deferred tax asset

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Consolidated Balance Sheets (USD $)	Dec. 31, 2013	Jan. 31, 2013
Current assets:
Cash and cash equivalents	$ 341,031	$ 7,599
Receivable from sale of preferred stock	472,000
Accounts receivable	387,279	146,845
Inventory	4,634
Prepaid expenses and other current assets	36,263	1,440
Total current assets	1,241,207	155,884
Fixed assets, net	31,325	7,653
Intangible assets, net	194,743	249,691
Other assets	3,049	1,620
Total assets	1,470,324	414,848
Current liabilities:
Accounts payable and accrued expenses	1,610,753	281,947
Deferred revenue	1,482,504	511,061
Loans payable, current portion	74,800	13,856
Loans payable - related parties	117,348
Derivative liabilities	11,268,087
Total current liabilities	14,553,492	806,864
Deferred revenue, long term	73,897	25,740
Convertible notes payable, net of discount of $311,806	862,019
Loans payable	25,266	37,620
Total liabilities	15,514,674	870,224
Stockholders' deficit
Common stock authorized 500,000,000 shares, $0.001 par value, 82,819,694 and 80,200,000 shares issued and outstanding, respectively	82,820	80,200
Additional paid in capital		(79,566)
Accumulated deficit	(14,093,652)	(454,968)
Accumulated other comprehensive income (loss)	(34,265)	(1,042)
Total stockholders' deficit	(14,044,350)	(455,376)
Total liabilities and stockholders' deficit	1,470,324	414,848
Preferred Stock, Undesignated
Stockholders' deficit
Preferred stock value
Preferred Stock, Series B
Stockholders' deficit
Preferred stock value	75
Preferred Stock,Series C
Stockholders' deficit
Preferred stock value	$ 672

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Loans Payable - Related Party (Details) (Shareholders [Member], USD $)	11 Months Ended
	Dec. 31, 2013
Shareholders [Member]
Related Party Transaction [Line Items]
Short term working capital loans	$ 121,000
Weighted average effective interest rate	13.50%
Interest expense related to loans	5,264
Repayment of loan	$ 9,000

XML

Consolidated Statements of Cash Flows (USD $)	11 Months Ended	12 Months Ended
	Dec. 31, 2013	Jan. 31, 2013
Cash flows from operating activities:
Net loss	$ (1,499,098)	$ (158,393)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	75,066	67,222
Amortization of debt discount	299,964
Changes in operating assets and liabilities:
Accounts receivable	(232,642)	61,151
Inventory	92,404
Prepaid expenses and other current assets	(32,916)	263
Other assets	(16)	7,149
Accounts payable and accrued expenses	275,922	12,378
Deferred revenue	991,802	(22,660)
Net cash used in operating activities	(29,514)	(32,890)
Cash flows from investing activities:
Cash paid for fixed assets	(36,540)	(4,528)
Net cash used in investing activities	(36,540)	(4,528)
Cash flows from financing activities:
Proceeds from sale of preferred stock	200,000
Proceeds from notes payable	100,000
Cash acquired in recapitalization	9,848
Repayment of loan	(12,748)	(13,431)
Advances from related parties	121,058
Repayments to related parties	(9,367)
Net cash provided by financing activities	408,791	(13,431)
Effect of exchange rate changes on cash	(9,305)	(1,926)
Net increase (decrease) in cash	333,432	(52,775)
Cash, beginning of period	7,599	60,374
Cash, end of period	341,031	7,599
Supplemental Schedule of Cash Flow Information:
Cash paid for interest	1,111	1,605
Non-cash investing and financing activities:
Contribution of inventory	97,038
Derivative liability of conversion feature of debt	399,964
Derivative liability of conversion feature of preferred stock	$ 2,363,797

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Summary of Significant Accounting Policies (Detail Textual)	11 Months Ended	12 Months Ended
	Dec. 31, 2013 USD ($)	Jan. 31, 2013 USD ($)	Dec. 31, 2013 US Bank [Member] USD ($)	Dec. 31, 2013 UK Bank [Member] USD ($)	Dec. 31, 2013 UK Bank [Member] EUR (€)
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Accounts receivable	$ 387,279	$ 146,845
Property and equipment useful lives	Three to four years.
Intangible assets estimated period of benefit	10 years
Common share equivalents excluded from the computation of the weighted average diluted shares	165,140,070	0
Concentration risk, percentage	27.00%	38.00%
Cash			$ 250,000	$ 140,000	€ 85,000

XML

Summary of Significant Accounting Policies (Policies)

11 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies [Abstract]

PRINCIPLES OF CONSOLIDATION

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Thinspace Technology, Inc. and its wholly-owned subsidiaries, Thinspace UK and Thinspace USA. All material inter-company accounts and transactions have been eliminated.

USE OF ESTIMATES

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS

For the purpose of the statements of cash flows, we consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE

Accounts receivable are reported at the customers' outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The Company evaluates receivables on a regular basis for potential reserve.The accounts receivable balances of $387,279 and $146,845 as of December 31, 2013 and January 31, 2013, respectively, do not included an allowance for doubtful accounts as the Company anticipates payment on all accounts within the next fiscal year. The Company routinely evaluates accounts receivable for uncollectible amounts.

REVENUE RECOGNITION

REVENUE RECOGNITION

Certain volume licensing arrangements include a perpetual license for current products combined with rights to receive unspecified future versions of software products, which the Company has determined are additional software products and are therefore accounted for as subscriptions, with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period. Arrangements that include term based licenses for current products with the right to use unspecified future versions of the software during the coverage period are also accounted for as subscriptions, with revenue recognized ratably over the coverage period.

Revenue from cloud-based services arrangements that allow for the use of a hosted software product or service over a contractually determined period of time without taking possession of software are accounted for as subscriptions with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period beginning on the date the service is made available to customers.

Some volume licensing arrangements include time-based subscriptions for cloud-based services and software offerings that are accounted for as subscriptions. These arrangements are considered multiple element arrangements. However, because all elements are accounted for as subscriptions and have the same coverage period and delivery pattern, they have the same revenue recognition timing.

DEFERRED REVENUE

DEFERRED REVENUE

Deferred revenue related to support and maintenance is recorded in a manner consistent with the Company’s revenue recognition policy. The Company typically enters into one-year upgrade and maintenance contracts with its customers. The upgrade and maintenance contracts are generally paid in advance but can be billed monthly or quarterly. The Company defers such payment and recognizes revenue ratably over the contract period.

LONG-LIVED ASSETS

LONG-LIVED ASSETS

We assess the carrying value of long-lived assets in accordance with ASC 360, "Property, Plant and Equipment". We assess the impairment of identifiable intangibles and long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important that could trigger an impairment review include, but are not limited to, the following: a significant underperformance to expected historical or projected future operating results, a significant change in the manner of the use of the acquired asset or the strategy for the overall business, or a significant negative industry or economic trend.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to operations.

The Company depreciates its property and equipment on a straight-line basis with estimated useful lives of three to four years.

INTANGIBLE ASSETS

INTANGIBLE ASSETS

The intangible assets of the Company are subject to amortization and are amortized using the straight-line method over their estimated period of benefit of 10 years. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired.

INVENTORY

INVENTORY

The Company values its inventory at the lower of cost (first-in, first-out) or market. The Company uses estimates and judgments regarding the valuation of inventory to properly value inventory. Inventory adjustments are made for the difference between the cost of the inventory and the estimated realizable value and charged to cost of goods sold in the period in which the facts that give rise to the adjustments become known.

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

Our short-term financial instruments, including cash, accounts receivable and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their terms.

Fair value measurements

ASC 820 “Fair Value Measurements and Disclosure” establishes a framework for measuring fair value and expands disclosure about fair value measurements. 

ASC 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes the following three levels of inputs that may be used:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  

In accordance with ASC 820, the following table represents the Company's fair value hierarchy for its financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2013:

	Level 1		Level 2		Level 3		Total
Liabilities
Conversion and warrant derivative liabilities		-		-		11,268,087		11,268,087
Total Liabilities	$	-	$	-	$	11,268,087	$	11,268,087

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (conversion and warrant derivative liabilities) for the eleven month period ended December 31, 2013.

	2013
Balance at beginning of year	$	-
Additions to derivative instruments		11,268,087
Change in fair value of warrant liability		-
Balance at end of period	$	11,268,087

The following is a description of the valuation methodologies used for these items:

Conversion derivative liability — these instruments consist of certain of our notes which are convertible based on a discount to the market value of our common stock. These instruments were valued using pricing models which incorporate the Company’s stock price, volatility, U.S. risk free rate, dividend rate and estimated life.

CONCENTRATIONS OF CREDIT RISK

CONCENTRATIONS OF CREDIT RISK

The Company performs ongoing credit evaluations of its customers. At December 31, 2013, two customers accounted for 27% or more of accounts receivable. At January 31, 2013, one customer accounted for 38% or more of accounts receivable.

The Company maintains cash and cash equivalents with major financial institutions. Cash held in US bank accounts is insured up to $250,000 at each institution. Cash held in UK bank accounts is insured up to £85,000 at December 31, 2013 (approximately $140,000 at December 31, 2013) at each institution for each entity.  At times, cash balances may exceed the insured limits. The Company has not experienced any loss on these accounts.  The balances are maintained in demand accounts to minimize risk.

RESEARCH AND DEVELOPMENT

RESEARCH AND DEVELOPMENT

Expenses related to present and future products are expensed as incurred.

FOREIGN CURRENCY TRANSLATION

FOREIGN CURRENCY TRANSLATION

The financial statements of the Company’s U.K. subsidiary, Thinspace UK, are measured using the British Pound as the functional currency. Assets, liabilities and equity accounts of the company are translated at exchange rates as of the balance sheet date or historical acquisition date, depending on the nature of the account. Revenues and expenses are translated at average rates of exchange in effect throughout the year. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders' equity. The financial statements are presented in United States of America dollars.

LOSS PER SHARE

LOSS PER SHARE

We use ASC 260, “Earnings Per Share” for calculating the basic and diluted income (loss) per share. We compute basic income (loss) per share by dividing net income (loss) and net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding.

Dilutive common stock equivalents consist of shares issuable upon conversion of debt and preferred stock and the exercise of our stock warrants. There were 165,140,070 common share equivalents at December 31, 2013 and none at January 31, 2013, which have been excluded from the computation of the weighted average diluted shares.

INCOME TAXES

INCOME TAXES

We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.    

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance, which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax provisions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

The Company has made a comprehensive review of its portfolio of uncertain tax positions in accordance with recognition standards established by the guidance. As a result of this review, the Company concluded that at this time there are no uncertain tax positions that would result in tax liability to the Company.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” ("ASU No. 2013-02").  ASU No. 2013-02 provides updated guidance to improve the reporting of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to present, either on the face of the statement of income or in the notes, separately for each component of comprehensive income, the current period reclassifications out of accumulated other comprehensive income by the respective line items of net income affected by the reclassification. The updated guidance was effective prospectively for reporting periods beginning after December 15, 2012. The Company adopted the updated guidance effective February 1, 2013, and such adoption did not have any effect on the Company's results of operations, financial position or liquidity.

In July 2013, the FASB issued Accounting Standards Update No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" ("ASU No. 2013-11"). ASU No. 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with limited exceptions. ASU No. 2013-11 is effective for interim and annual periods beginning after December 15, 2013 and may be applied retrospectively. The adoption of the provisions of ASU No. 2013-11 is not expected to have a material impact on the company's financial position or results of operations.

In March 2013, the FASB issued Accounting Standards Update No. 2013-05, "Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity" ("ASU No. 2013-05"). ASU No. 2013-05 requires an entity that ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. ASU No. 2013-05 is effective for interim and annual periods beginning after December 15, 2013, with early adoption permitted and is to be applied prospectively. The adoption of the provisions of ASU No. 2013-05 is not expected to have a material impact on the company's financial position or results of operations.

Other recent accounting pronouncements issued by the FASB and the SEC did not, or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

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Property and Equipment (Details) (USD $)	Dec. 31, 2013	Jan. 31, 2013
Summary of property and equipment
Office equipment and furniture	$ 91,637	$ 51,950
Accumulated depreciation	(60,312)	(44,297)
Carrying value	$ 31,325	$ 7,653

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Summary of Significant Accounting Policies (Tables)

11 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies [Abstract]

Schedule of financial assets and liabilities measured at fair value on a recurring basis

	Level 1		Level 2		Level 3		Total
Liabilities
Conversion and warrant derivative liabilities		-		-		11,268,087		11,268,087
Total Liabilities	$	-	$	-	$	11,268,087	$	11,268,087

Schedule of a summary of changes in the fair value of the Company's Level 3 financial liabilities - Warrant derivative liability and Conversion derivative liability

	2013
Balance at beginning of year	$	-
Additions to derivative instruments		11,268,087
Change in fair value of warrant liability		-
Balance at end of period	$	11,268,087

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Organization and Line of Business

11 Months Ended

Dec. 31, 2013

Organization and Line of Business [Abstract]

ORGANIZATION AND LINE OF BUSINESS

NOTE 1 - ORGANIZATION AND LINE OF BUSINESS

COMPANY OVERVIEW

Nature of Operations

THINSPACE TECHNOLOGY, INC. (formerly Vanity Events Holding, Inc.  (the “Company” or “Thinspace” or “we” or “our”), was organized as a Delaware Corporation on August 25, 2004, and is a holding company. We are a cloud computing company that  develops software productivity solutions that allow our customers secure access to centrally managed desktops or software applications  and to work and collaborate from anywhere, accessing enterprise apps and data on any of the latest devices, as easily as they would in their own office- simply and securely.

The Company’s principal activity is the development and sale of network software. The company has 5 key products:

•   Propalms TSE - a simple management solution for Microsoft remote desktop users.

•   Propalms VPN - allows secure remote access to applications and data from outside of the corporate network.

•  

Propalms VDI - allows customers to run virtual desktops on the internet.

•   Pano Logic G2 – The G2 is a Zero Client that replaces traditional desktops, allows secure fast access to hosted virtual desktops

•   Thin Space – A branded hardware Zero Client solution aimed for the enterprise and corporate market.

We sell directly to independent software vendors and Application Service Providers (ASPs) and sell to end users through a chain of distributors and resellers. The larger customers are predominantly large businesses based around the world, with a concentration in North America, the Far East and India.

Our operating subsidiaries are Thinspace Technology Ltd (“Thinspace UK”), organized and operating in the United Kingdom, and Thinspace Technology Ltd. (“Thinspace USA”), a Nevada corporation formed on August 24, 2010 and operating in the states of California, Colorado and Florida.

Pursuant to an Agreement of Merger and Reorganization dated December 31, 2013 (the “Agreement”) between Vanity Events Holding, Inc., VAEV Merger Sub, Inc., and Thinspace UK, VAEV Merger Sub merged with Thinspace UK and all of the issued and outstanding shares of Thinspace UK were exchanged for 80,200,000 common shares of Vanity Events Holding, Inc. The transaction has been accounted for as a reverse acquisition of Vanity by Thinspace UK but in substance as a capital transaction, rather than a business combination since Vanity had minimal operations and assets as of the closing of the transaction. The stockholders of Thinspace UK own a majority of the Company’s voting power immediately following the transaction and Thinspace UK’s management has assumed operational, management and governance control. The transaction is deemed as reverse recapitalization and the accounting is similar to that resulting from a reverse acquisition, except that no goodwill or other intangible assets should be recorded.  Thinspace UK is treated as the surviving and continuing entity.   The Company did not recognize goodwill or any intangible assets in connection with this transaction. Accordingly, the Company’s historical financial statements are those of Thinspace UK and its subsidiary, Thinspace USA.

Vanity assets and liabilities retained subsequent to the transaction are as follows:

Cash	$	9,848
Other assets		1,349
Accounts payable and accrued expenses		(1,032,603	)
Notes payable		(922,019	)
Derivative liabilities		(8,504,326	)
Net liabilities retained	$	(10,447,751	)

We have changed the fiscal year end of Thinspace UK and Thinspace USA to December 31 to match that of Vanity Events year end prior to merger. Therefore, our statements of operations, cash flows and changes in stockholders’ equity for the periods ended December 31, 2013 cover an eleven month period.

BASIS OF PRESENTATION AND GOING CONCERN

Basis of Presentation

We have incurred a net loss of $1,499,098 for the eleven months ended December 31, 2013. As of December 31, 2013 we have negative working capital of $13,312,285 and a stockholders’ deficit of $14,044,350. As a result, there is substantial doubt about the Company’s ability to continue as a going concern at December 31, 2013.

Management has implemented its business plan to add new products, increase marketing activities and, as a result, increase revenue. Our ability to implement our current business plan and continue as a going concern ultimately is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and to achieve profitable operations.

There can be no assurances that funds will be available to the Company when needed or, if available, that such funds would be available under favorable terms. In the event that the Company is unable to generate adequate revenues to cover expenses and cannot obtain additional funds in the near future, the Company may seek protection under bankruptcy laws.  To date, management has not considered this alternative, nor does management view it as a likely occurrence, since the Company is progressing with various potential sources of new capital and we anticipate a successful outcome from these activities. However, capital markets remain difficult and there can be no certainty of a successful outcome from these activities. 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.   

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2013	Jan. 31, 2013
Discount on convertible notes payable (in dollars)	$ 311,806
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	82,819,694	80,200,000
Common stock, shares outstanding	82,819,694	80,200,000
Preferred stock, par value (in dollars per share)	$ 0.001
Preferred stock, shares authorized	50,000,000
Preferred Stock, Undesignated
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	49,253,000	49,253,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Preferred Stock, Series B
Preferred stock, par value (in dollars per share)	$ 1.00	$ 0.001
Preferred stock, shares authorized	75,000	75,000
Preferred stock, shares issued	75,000
Preferred stock, shares outstanding	75,000
Series C Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	672,000	672,000
Preferred stock, shares issued	672,000
Preferred stock, shares outstanding	672,000

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Related Party Transactions

11 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 11– RELATED PARTY TRANSACTIONS

An entity owned by certain of our shareholders provided management services to the Company. Fees incurred for the eleven months ended December 31, 2013 and the year ended January 31, 2013 were $277,940 and $144,480, respectively.

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Document and Entity Information (USD $)	11 Months Ended
	Dec. 31, 2013	Mar. 18, 2014	Jun. 30, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	Thinspace Technology, Inc.
Entity Central Index Key	0001393935
Trading Symbol	thns
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-K
Document Period End Date	Dec. 31, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding		91,621,564
Entity Public Float			$ 888,666

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Stockholders' Equity

11 Months Ended

Dec. 31, 2013

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 12 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue 50,000,000 shares of preferred stock, with par value of $0.001 per share, of which 75,000 shares have been designated as Series B 10% Convertible preferred stock, with par value of $0.001 per share, and 672,000 shares have been designated as Series C Convertible preferred stock. There were 75,000 Series B shares and 672,000 Series C shares issued and outstanding as of December 31, 2013.

Each share of Series B Preferred Stock has a stated value equal to $1.00 per share and is initially convertible at any time into shares of the Company’s common stock at a conversion price equal to $0.60 per share or an aggregate of 125,000 shares of the Company’s common stock.  The conversion price of the Series B Preferred Stock is subject to full ratchet and anti-dilution adjustment for subsequent lower price issuances by the Company, as well as customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like.

Each holder of Series C Preferred Stock shall have the right to convert all (but not part) of such holder’s shares of Series C Convertible Preferred Stock such that each share of Series C Convertible Preferred Stock shall convert into that number of fully paid and non-assessable shares of Common Stock equal to the of the number of preferred shares divided by the lowest closing bid price during the twenty trading days prior to the notice of conversion multiplied by .25 (one-fourth).

We sold 672,000 shares of Series C Preferred Stock on December 31, 2013 and received proceeds of $672,000 (of which $200,000 was received on December 31, 2013 and $472,000 was received in January 2014). Because the shares are convertible at a discount to market value of our common shares, we have recorded a derivative liability for the conversion feature in the amount of $2,363,797. This amount is reflected as a deemed dividend to the preferred shareholders.

Common Stock

The Company is authorized to issue 500,000,000 shares of common stock, with par value of $0.001 per share. As of December 31, 2013 and January 31, 2013, there were 82,819,694 and 80,200,000 shares of common stock issued and outstanding, respectively, after giving effect to the recapitalization.

Warrants Outstanding

At December 31, 2013 we have an aggregate of 4,306,932 common stock purchase warrants outstanding and exercisable. The warrants currently have an exercise price of $0.0625 per share. The warrants expire on various dates between April 5, 2014 and November 10, 2014 and have a weighted average remaining life of 0.53 years at December 31, 2013. The warrants contain a price reset feature and are accounted for as derivative liabilities.

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Consolidated Statements of Operations and Comprehensive Loss (USD $)	11 Months Ended	12 Months Ended
	Dec. 31, 2013	Jan. 31, 2013
Income Statement [Abstract]
Revenues	$ 1,509,286	$ 1,069,612
Cost of goods sold	647,839	462,609
Gross profit	861,447	607,003
Operating expense:
Selling, general and administrative	1,979,139	696,569
Depreciation and amortization	75,066	67,222
Total operating expense	2,054,205	763,791
Loss from operations	(1,192,758)	(156,788)
Interest expense	(306,340)	(1,605)
Loss before provision for income taxes	(1,499,098)	(158,393)
Provision for income taxes
Net loss	(1,499,098)	(158,393)
Preferred dividend	(2,363,797)
Net loss attributable to common shareholders	(3,862,895)	(158,393)
Basic and diluted loss per share	$ (0.05)	$ 0.00
Weighted average shares outstanding, Basic and diluted	80,207,843	80,200,000
Comprehensive loss:
Net loss	(1,499,098)	(158,393)
Foreign currency translation adjustments	(33,223)	548
Comprehensive loss	$ (1,532,321)	$ (157,845)

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Derivative Liabilities

11 Months Ended

Dec. 31, 2013

Derivative Liabilities [Abstract]

DERIVATIVE LIABILITIES

NOTE 6 –DERIVATIVE LIABILITIES

The Company has identified certain embedded derivatives related to its convertible notes, convertible preferred stock, common stock purchase warrants and a debt purchase agreement. Since certain of the notes, the preferred stock and the debt settlement agreement are convertible into a variable number of shares, the conversion features of those debentures are recorded as derivative liabilities. Since the warrants have a price reset feature, they are recorded as derivative liabilities. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to adjust to fair value as of each subsequent balance sheet date. 

Convertible Notes and Debt Settlement Agreement

At December 31, 2013, we recalculated the fair value of the embedded conversion feature of our notes and debt settlement agreement subject to derivative accounting and have determined that their fair value at December 31, 2013 was $7,719,873. The value of the conversion liabilities was determined using the Black-Scholes method based on the following assumptions:  (1) risk free interest rate of 0.69%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 432% and (4) an expected life of 3 years.

Convertible Preferred Stock

At December 31, 2013, we recalculated the fair value of the embedded conversion feature of our preferred stock subject to derivative accounting and have determined that their fair value at December 31, 2013 was $2,663,687. The value of the conversion liabilities was determined using the Black-Scholes method based on the following weighted average assumptions:  (1) risk free interest rate of 0.19%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 242% and (4) an expected life of 1.15 years.

Warrant Liabilities

At December 31, 2013, we recalculated the fair value of the warrants containing a price reset feature subject to derivative accounting and have determined that the fair value at December 31, 2013 was $884,527. The value of the warrant liabilities was determined using the Black-Scholes method based on the following weighted average assumptions:  (1) risk free interest rate of 0.09%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 195% and (4) an expected life of 0.53 years.

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Inventory

11 Months Ended

Dec. 31, 2013

Inventory [Abstract]

INVENTORY

NOTE 5 – INVENTORY

Inventory at December 31, 2013 consists of finish goods purchased hardware that is sold in connection with our software products.

During the eleven months ended December 31, 2013 we acquired inventory from a related party. We have valued this inventory at $97,038 and have recorded this amount as a contribution to capital.

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Organization and Line of Business (Tables)

11 Months Ended

Dec. 31, 2013

Organization and Line of Business [Abstract]

Schedule of assets and liabilities of retained subsequent

Cash	$	9,848
Other assets		1,349
Accounts payable and accrued expenses		(1,032,603	)
Notes payable		(922,019	)
Derivative liabilities		(8,504,326	)
Net liabilities retained	$	(10,447,751	)

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Provision for Income Taxes

11 Months Ended

Dec. 31, 2013

Provision for Income Taxes [Abstract]

PROVISION FOR INCOME TAXES

NOTE 13 - PROVISION FOR INCOME TAXES

The Company utilizes ASC 740 “Income Taxes”, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

For the eleven months ended December 31, 2013 and the year ended January 31, 2013, the Company had available for U.S federal income tax purposes net operating loss carryovers of approximately $529,000 and $0, respectively, which expire beginning in 2033. The net operating loss carryovers may be subject to limitations under Internal Revenue Code due to significant changes in the Company’s ownership. The Company has provided a full valuation allowance against the full amount of the net operating loss benefit, since, in the opinion of management, based upon the earnings history of the Company it is more likely than not that the benefits will not be realized.  

For the eleven months ended December 31, 2013 and the year ended January 31, 2013, the Company had available for UK income tax purposes net operating loss carryovers of approximately $651,000 and $455,000, respectively, which can be carried forward indefinitely. The Company has provided a full valuation allowance against the  amount of UK unused net operating loss benefit, since  management believes that, based upon the earnings history of the Company, it is more likely than not that the benefits will not be realized.

The income tax provision (benefit) consists of the following:

	December 31, 2013			January 31, 2013
Federal:
Current	$	-		$	-
Deferred		368,000			44,000
		368,000			44,000
State and local:
Current		-			-
Deferred		21,000			-
		21,000			-
Change in valuation allowance		(389,000	)		(44,000	)
Income tax provision (benefit)	$	-		$	-

The provision for income taxes differ from the amount of income tax determined by applying the applicable U.S statutory rate to losses before income tax expense for the eleven months ended December 31, 2013 and the year ended January 31, 2013 as follows:

	December 31, 2013			January 31, 2013
Statutory federal income tax rate		(34.0	%)		(34.0	%)
Statutory state and local income tax rate (6%), net of federal benefit		(4.0	%)		(4.0	%)
Foreign tax rate differentials		4.5	%		10.0	%
Derivative liabilities adjustments		7.6	%		-
Change in valuation allowance		25.9	%		28.0	%
Effective tax rate		0.00	%		0.00	%

Deferred income taxes result from temporary differences in the recognition of income and expenses for financial reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following:

	December 31,				January 31,
	2013				2013
Deferred tax assets:
Net operating loss carry forward		$	516,000			$	127,000
Less:  valuation allowance			(516,000	)			(127,000	)
Net deferred tax asset		$	-			$	-

The Company has filed its tax returns for periods through January 31, 2013.

The provisions of ASC 740 require companies to recognize in their financial statements the impact of a tax position if that position is more likely than not to be sustained upon audit, based upon the technical merits of the position. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure.

Management does not believe that the Company has any material uncertain tax positions requiring recognition or measurement in accordance with the provisions of ASC 740. Accordingly, the adoption of these provisions of ASC 740 did not have a material effect on the Company’s financial statements. The Company’s policy is to record interest and penalties on uncertain tax positions, if any, as income tax expense.

All tax years for the Company remain subject to future examinations by the applicable taxing authorities.

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Loans Payable - Related Party

11 Months Ended

Dec. 31, 2013

Converteble Notes Payable, Loans Payable and Loans Payable - Related party [Abstract]

LOANS PAYABLE - RELATED PARTY

NOTE 9 – LOANS PAYABLE – RELATED PARTY

Entities controlled by certain shareholders have provided short term working capital loans to the Company aggregating approximately $121,000 during the eleven months ended December 31, 2013. The loans bear a weighted average effective interest rate of 13.5%. The Company repaid approximately $9,000 in 2013.

Interest expense related to these loans of $5,264 has been recorded for the eleven months ended December 31, 2013

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Convertible Notes Payable

11 Months Ended

Dec. 31, 2013

Convertible Notes Payable [Abstract]

CONVERTIBLE NOTES PAYABLE

NOTE 7 – CONVERTIBLE NOTES PAYABLE

We are a party to a total of eighteen convertible notes aggregating an outstanding principal balance of $1,173,825 at December 31, 2013, with related accrued and unpaid interest of $209,972. Of these notes, sixteen notes, aggregating $1,073,825 of principal, are convertible at discounts to the market price of our common stock of 75% - 90%. Two notes, aggregating $100,000 principal balance, are convertible at a fixed conversion rate of $0.001 per share. The convertible notes, as amended, bear interest at a weighted average rate of 9% per year and mature in December of 2016. Debt discount of $311,806 will be amortized over the remaining lives of the related notes.

IBC Funds LLC $100,000 Debenture

On December 31, 2013, the Company entered into a Securities Purchase Agreement with CP US Income Group, LLC (CP US), an accredited investor, providing for the sale by the Company to CP US of an 8% convertible debenture in the aggregate principal amount of $100,000 (such balance being included in the balance noted in the preceding paragraph). The CP US debenture matures on December 31, 2016 and bears interest a rate of 8% per annum, payable annually. The Investor may convert, at any time, the outstanding principal and accrued interest on the CP debenture into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) at a conversion price that is seventy five percent (75%) discount of the low closing bid price of the Common Stock during the twenty (20) trading days immediately preceding the conversion date. The Conversion Price may be adjusted pursuant to the other terms of this Debenture.

The conversion feature of the CP US debenture contains a variable conversion rate. As a result, we have classified the conversion feature as a derivative liability in the financial statements. At issue, we have recorded a conversion feature liability of $399,964. The value of the conversion feature liability was determined using the Black-Scholes method based on the following assumptions:  (1) risk free interest rate of 0.625%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 432%; and (4) an expected life of 3 years. The Company has allocated $100,000 to debt discount, to be amortized over the life of the debt, with the balance of $299,964 being charged to expense at issue.

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Loans Payable

11 Months Ended

Dec. 31, 2013

Converteble Notes Payable, Loans Payable and Loans Payable - Related party [Abstract]

LOANS PAYABLE

NOTE 8 – LOANS PAYABLE

Loan payable consisted of the following:

	December 31,			January 31,
	2013			2013
Bank loan payable	$	40,066		$	51,476
Demand loans payable		60,000			-
		100,066			51,476
Current portion		(74,800	)		(13,856	)
Long term portion	$	25,266		$	37,620

The Company is obligated under a bank loan bearing interest at a rate of 2.2% over the bank’s base rate, maturing in 2016.

The Company is obligated under a note payable in the amount of $10,000. The note bears interest at 10% per year and matured on December 31, 2013.

The Company has received funds from an accredited investor, as a non-interest-bearing loan, without formal loan agreements and terms. The amounts received were $50,000, and were loaned as an accommodation to the Company. These advances remain outstanding at December 31, 2013.

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Deferred Revenue

11 Months Ended

Dec. 31, 2013

Deferred Revenue [Abstract]

DEFERRED REVENUE

NOTE 10 – DEFERRED REVENUE

Deferred revenue consists of funds received in advance of services being performed. At December 31, 2013 and January 31, 2013, the deferred revenue balance consisted of the following:

	December 31,		January 31,
	2013		2013
Deferred revenue due within one year	$	1,482,504	$	511,061
Deferred revenue due after one year		73,897		25,740
Carrying value	$	1,556,401	$	536,801

Unearned revenue comprises mainly unearned revenue from sales and licensing of software programs, and payments for products and services for which the Company has been paid in advance and we earn the revenue as we provide the service or software or otherwise meet the revenue recognition criteria.

Unearned revenue from sales and licensing of software programs represents customer billings for multi-year licensing arrangements paid either at inception of the agreement or annually at the beginning of each coverage period and accounted for as subscriptions with revenue recognized ratably over the coverage period.

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Summary of Significant Accounting Policies (Details 1) (USD $)	11 Months Ended
	Dec. 31, 2013
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of year
Additions to derivative instruments	11,268,087
Change in fair value of warrant liability
Balance at end of period	$ 11,268,087

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Provision for Income Taxes (Details) (USD $)	11 Months Ended	12 Months Ended
	Dec. 31, 2013	Jan. 31, 2013
Federal:
Current
Deferred	368,000	44,000
Federal, total	368,000	44,000
State and local:
Current
Deferred	21,000
State and local, total	21,000
Change in valuation allowance	(389,000)	(44,000)
Income tax provision (benefit)

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Subsequent Events

11 Months Ended

Dec. 31, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 15 - SUBSEQUENT EVENTS

During January 2014 we paid $360,000 pursuant to a consulting agreement for strategic advisory services. We also issued 5,000,000 shares of common stock as additional compensation pursuant to the agreement. The term of the agreement covers the 2014 calendar year.

During January 2014 we cancelled 250,000 shares of common stock which had been issued by Vanity in July of 2012 as payment for consulting services, pursuant to an agreement with the consultant.

During February 2014 we issued an aggregate of 4,051,870 shares of common stock upon the conversion of $191,184 of notes and $11,409 of accrued interest.

IBC 150K Financing

On February 21, 2014, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC (“IBC”) pursuant to which the Company sold to IBC an 8% convertible debenture in the principal amount of $150,000 (the “Debenture”). The Debenture matures on the third anniversary of the date of issuance (the “Maturity Date”) and bears interest at a rate of 8% per annum, payable semi-annually and on the Maturity Date. IBC may convert, at any time, the outstanding principal and accrued interest on the Debenture into shares of the Company’s common stock, at a conversion per share at 25% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days.

With the exception of the shares that the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the conversion price of the Debenture shall be subject to adjustment for issuances of common stock or securities convertible into common stock or exercisable for shares of common stock at a purchase price of less than the then-effective conversion price, on any unconverted amounts, such that the then applicable conversion price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants.

IBC 50K Financing

On March 21, 2014, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC (“IBC”) pursuant to which the Company sold to IBC an 8% convertible debenture in the principal amount of $50,000 (the “Debenture”). The Debenture matures on the third anniversary of the date of issuance (the “Maturity Date”) and bears interest at a rate of 8% per annum, payable semi-annually and on the Maturity Date. IBC may convert, at any time, the outstanding principal and accrued interest on the Debenture into shares of the Company’s common stock, at a conversion per share at 25% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days.

With the exception of the shares that the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the conversion price of the Debenture shall be subject to adjustment for issuances of common stock or securities convertible into common stock or exercisable for shares of common stock at a purchase price of less than the then-effective conversion price, on any unconverted amounts, such that the then applicable conversion price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants.

Greystone 50K Financing

On March 21, 2014, the Company entered into a Securities Purchase Agreement with Greystone Capital Partners, Inc. (“Greystone”) pursuant to which the Company sold to Greystone at an 8% convertible debenture in the principal amount of up to $50,000 (the “Debenture”). The Debenture matures on the third anniversary of the date of issuance (the “Maturity Date”) and bears interest a rate of 8% per annum, payable semi-annually and on the Maturity Date. Greystone may convert, at any time, the outstanding principal and accrued interest on the Debenture into shares of the Company’s common stock, at a conversion the conversion price per share at 25% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days (the “Conversion Price”).

With the exception of the shares that the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the conversion price of the Debenture shall be subject to adjustment for issuances of common stock or securities convertible into common stock or exercisable for shares of common stock at a purchase price of less than the then-effective conversion price, on any unconverted amounts, such that the then applicable conversion price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants.

Greystone 50K Financing

On March 26, 2014, the Company entered into a Securities Purchase Agreement with Greystone Capital Partners, Inc. (“Greystone”) pursuant to which the Company sold to Greystone at an 8% convertible debenture in the principal amount of up to $50,000 (the “Debenture”). The Debenture matures on the third anniversary of the date of issuance (the “Maturity Date”) and bears interest a rate of 8% per annum, payable semi-annually and on the Maturity Date. Greystone may convert, at any time, the outstanding principal and accrued interest on the Debenture into shares of the Company’s common stock, at a conversion price per share at 25% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days (the “Conversion Price”).

With the exception of the shares that the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the conversion price of the Debenture shall be subject to adjustment for issuances of common stock or securities convertible into common stock or exercisable for shares of common stock at a purchase price of less than the then-effective conversion price, on any unconverted amounts, such that the then applicable conversion price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants.

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Intangible Assets (Tables)

11 Months Ended

Dec. 31, 2013

Intangible Assets [Abstract]

Intangible assets

	December 31,			January 31,
	2013			2013
Developed technology	$	649,159		$	624,237
Accumulated amortization		(454,416	)		(374,546	)
Carrying value	$	194,743		$	249,691

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Stockholders' Equity (Detail Textual 1) (USD $)	Dec. 31, 2013	Jan. 31, 2013
Stockholders' Equity [Abstract]
Common stock, shares authorized	500,000,000	500,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares issued	82,819,694	80,200,000
Common stock, shares outstanding	82,819,694	80,200,000

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Derivative Liabilities (Details) (USD $)	11 Months Ended
	Dec. 31, 2013
Warrant Liabilities [Member]
Derivative Liabilities Textual [Abstract]
Fair value assumptions, method used	Black-Scholes method
Conversion feature liability	$ 884,527
Fair value assumptions, risk free interest rate	0.09%
Fair value assumptions, dividend yield	0.00%
Fair value assumptions, expected volatility rate	195.00%
Fair value assumptions, expected life (in years)	6 months 11 days
Convertible Preferred Stock [Member]
Derivative Liabilities Textual [Abstract]
Fair value assumptions, method used	Black-Scholes method
Conversion feature liability	2,663,687
Fair value assumptions, risk free interest rate	0.19%
Fair value assumptions, dividend yield	0.00%
Fair value assumptions, expected volatility rate	242.00%
Fair value assumptions, expected life (in years)	1 year 1 month 24 days
Convertible Debt [Member]
Derivative Liabilities Textual [Abstract]
Fair value assumptions, method used	Black-Scholes method
Conversion feature liability	$ 7,719,873
Fair value assumptions, risk free interest rate	0.69%
Fair value assumptions, dividend yield	0.00%
Fair value assumptions, expected volatility rate	432.00%
Fair value assumptions, expected life (in years)	3 years

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Consolidated Statement of Stockholders' Equity (Deficiency) (USD $)	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Balance at Jan. 31, 2012	$ (297,531)		$ 80,200	$ (79,570)	$ (1,590)	$ (296,571)
Balance (in shares) at Jan. 31, 2012			80,200,000
Foreign currency translation adjustments	548			4	548	(4)
Net loss	(158,393)					(158,393)
Balance at Jan. 31, 2013	(455,376)		80,200	(79,566)	(1,042)	(454,968)
Balance (in shares) at Jan. 31, 2013			80,200,000
Foreign currency translation adjustments	(33,223)				(33,223)
Shares retained by Vanity shareholders and effect of recapitalization	(10,461,894)	75	2,620			(10,464,589)
Shares retained by Vanity shareholders and effect of recapitalization (in shares)		75,000	2,619,694
Sale of preferred stock	672,000	672		671,328
Sale of preferred stock (in shares)		672,000
Contribution of inventory by related party	97,038			97,038
Deemed dividend - value of preferred derivative	(2,363,797)			(688,800)		(1,674,997)
Net loss	(1,499,098)					(1,499,098)
Balance at Dec. 31, 2013	$ (14,044,350)	$ 747	$ 82,820		$ (34,265)	$ (14,093,652)
Balance (in shares) at Dec. 31, 2013		747,000	82,819,694

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Intangible Assets

11 Months Ended

Dec. 31, 2013

Intangible Assets [Abstract]

INTANGIBLE ASSETS

NOTE 4 – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	December 31,			January 31,
	2013			2013
Developed technology	$	649,159		$	624,237
Accumulated amortization		(454,416	)		(374,546	)
Carrying value	$	194,743		$	249,691

Technology-based intangible assets included software to be sold, leased, or otherwise marketed.

Amortization expense for the eleven months ended December 31, 2013 and the year ended January 31, 2013 was $61,464 and $62,550, respectively. The Company estimates they have no significant residual value related to the intangible assets. No material impairments of intangible assets were identified during any of the periods presented.

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Loans payable (Tables)

11 Months Ended

Dec. 31, 2013

Converteble Notes Payable, Loans Payable and Loans Payable - Related party [Abstract]

Schedule of loans payable

	December 31,				January 31,
		2013				2013
Bank loan payable		$	40,066			$	51,476
Demand loans payable			60,000				-
			100,066				51,476
Current portion			(74,800	)			(13,856	)
Long term portion		$	25,266			$	37,620

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Intangible Assets (Details) (USD $)	Dec. 31, 2013	Jan. 31, 2013
Intangible Assets [Abstract]
Developed technology	$ 649,159	$ 624,237
Accumulated amortization	(454,416)	(374,546)
Carrying value	$ 194,743	$ 249,691

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Commitments and Contingencies

11 Months Ended

Dec. 31, 2013

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 14 - COMMITMENTS AND CONTINGENCIES

LEASE

We currently occupy office space pursuant to various short term leases expiring in 2014.

Rent expense for the eleven months ended December 31, 2013 and the year ended January 31, 2013 was $153,507 and $53,723, respectively.

LITIGATION

From time to time, The Company and its subsidiaries may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.  However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. The Company and its subsidiaries are currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.