10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2013
OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number: 333-147247

Attune RTD, Inc.

(Exact name of registrant as specified in its charter)

Nevada	32-0212241
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3111 Tahquitz Canyon Way Palm Springs, CA	92263
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (855) 274-6928

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

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.00004897 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [X]

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

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. Yes [X] 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] 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	[  ]	Accelerated filer	[  ]
Non-accelerated filer (Do not check if a smaller reporting company)	[  ]	Smaller reporting company	[X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the closing price as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $3,678,870.

The number of shares outstanding of the registrant’s common stock, as of March 31, 2014, was 43,312,429.

Table of Contents

		Page No
PART I		3
ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS.	11
ITEM 2.	PROPERTIES.	17
ITEM 3.	LEGAL PROCEEDINGS.	17
ITEM 4.	MINE SAFETY DISCLOSURES	18

PART II		19
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.	19
ITEM 6.	SELECTED FINANCIAL DATA.	20
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCOURSES ABOUT MARKET RISK.	25
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.	F-1 - F-29
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.	25
ITEM 9A.	CONTROLS AND PROCEDURES.	25
ITEM 9B.	OTHER INFORMATION.	27

PART III		30
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATION GOVERNANCE.	30
ITEM 11.	EXECUTIVE COMPENSATION.	32
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.	34
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.	36
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES.	37

PART IV	38
SIGNATURES	40
EXHIBITS

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PART I

This Annual Report contains forward-looking statements as defined under the federal securities laws. All statements other than statements of historical facts included in this Annual Report on Form 10-K regarding our financial performance, business strategy and plans and objectives of management for future operations and any other future events are forward-looking statements and based on our beliefs and assumptions. Words such as “may,” “will,” “expect,” “might,” “believe,” “anticipate,” “intend,” “could,” “estimate,” “project,” “plan,” and other similar words are one way to identify such forward-looking statements. Actual results could vary materially from these forward-looking statements. Such statements reflect our current view with respect to future events and are subject to certain risks, uncertainties, and assumptions including, without limitation, those risks and uncertainties contained in the Risk Factors section of this Annual Report on Form 10-K and our other filings made with the SEC. Although we believe that our expectations are reasonable, we can give no assurance that such expectations will prove to be correct. Based upon changing conditions, any one or more of these events described herein as anticipated, believed, estimated, expected or intended may not occur. All prior and subsequent written and oral forward-looking statements attributable to our Company or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement. We do not intend to update any of the forward-looking statements after the date of this Annual Report to conform these statements to actual results or to changes in our expectations, except as required by law.

ITEM 1. BUSINESS

Company Overview

We incorporated in Nevada in December 2001 as Catalyst Set Corporation and remained dormant until July 2007. In September 2007, we changed our name to Interfacing Technologies, Inc. In March 2008, we changed our name to Attune RTD, Inc., which we believe more accurately reflects our current business operations.

We maintain our principal place of business and corporate headquarters at 3111 Tahquitz Canyon Way, Palm Springs, California 92263. Our phone number is: (855)274-6928. Our corporate website is www.attunertd.com. Our product website is www.briowave175.com. We do not intend for information notated on our websites to be incorporated into this report.

Business Summary

We are an environmentally conscious, socially responsible company aiming to develop and provide smart products that eliminate inefficiencies and reduce energy consumption. We formed our Company to provide consumers with affordable, developed technology related to the operations of energy efficient electronic systems such as swimming pool pumps, sprinkler controllers and heating and air conditioning controllers, among others. Our products are focused around our patented and proprietary BrioWave technology. We currently focus on two lines of business: building products for energy efficient solutions for owners of residential swimming pools and building products for residential and commercial solar power systems.

Currently, our main focus is on designing products and solutions, using our patented and proprietary BrioWave technology, that are intended to promote energy conservation and to save costs for owners of residential swimming pools. Our products are also designed to prevent potential costly maintenance problems from occurring in swimming pool filtration systems. We currently have two models of our Smart Energy Management Controller, the BrioWave 175p and the BrioWave 175w, and both are designed to use an interactive Graphical User Interface (GUI) we have developed. We also sell turnkey solar power systems that are designed to complement and work with our proprietary BrioWave and BrioWEMS energy saving hardware and software.

Our BrioWave technology is designed to conserve energy and reduce costs through an electrical control center with timing mechanisms linking the pool owner’s air conditioning/heating, or HVAC unit, and the pool circulation and filtration system. It coordinates the timing of operation of the HVAC unit and the pool circulation and filtration system. The device is also designed to reduce potential costly swimming pool maintenance problems by monitoring pressure in a swimming pool’s filtration system.

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The BrioWave 175w Smart Energy Management Controller is Wi-Fi enabled, allowing it to communicate through a residential home router for the purpose of accessing a company server hosting a database that displays an interactive Graphical User Interface (GUI), also known as the “Dashboard.” The Dashboard is a server-based software platform which consists of various pages and views that allow users of our Smart Energy Management Controllers to access, control, change and view the BrioWave parameters from any mainstream web browser using a computer, tablet or mobile device. The Dashboard was launched in November 2010. Modifications to the GUI continue, and remains unfinished and is not ready for commercial usage or deployment at this time.

BrioWave devices are configured with a socket to accept a wireless radio for the purpose of communicating directly to the newly developed globally implemented smart meter that allows the utilities to measure energy inflow and outflows during times of use, and allowing for integration within the utilities newly developed smart grid infrastructure. BrioWave technology offers ease of integration, hardware architecture flexibility, and cross functionality across multiple physical layers, including, but not limited to wireless, and powerline to communicate to utility installed smart meters using Smart Energy Profile Generation 1, or Smart Energy Profile Generation 2, to provide support for all function sets that include, but are not limited to, billing, device capability, demand response, distributed energy resources, pricing and over the air updates. Smart Energy Profile 1 and 2 are accepted Internet based protocols for use in energy management by both wired and wireless Home Area Networks. Both protocols are supported by many stakeholders across the energy supply ecosystem including, but not limited to, manufacturers of smart meters, appliances, programmable thermostats and other devices in homes, utilities, energy service providers as well as various government and standards organizations around the world. For this purpose, our technology was built with a socket that accepts a ZigBee wireless radio. ZigBee radios are not the property of Attune RTD and must be procured by outside vendors at additional cost.

We continue to seek $4,375,000 in capital financing for inventory, operations and marketing expenses over the next two years. This funding is not required all at once to implement out business plan, as the business can continue to operate and meet its current administrative and software development expenses on a limited basis requiring $1,400,500 over the next 12 months or until full funding occurs. If we are unable to obtain sufficient funding, we may be unable to continue operations and the Company may be forced to wind down operations or into Bankruptcy or liquidation proceedings. Our lack of capital has resulted in the delay launching its BrioWave 175p technology which was originally scheduled for launch by end of June 2012.

If we secure all of this funding, we will be able to create an inventory of approximately 3,000 BrioWave 175p units, hire various sales representatives, implement the company’s marketing communication strategy which includes television, print and digital marketing communications, complete the business intelligence software module, complete development on the BrioWave 325p.

Principal Products

Smart Energy Management Controllers

The BrioWave 175p is our first product. It was designed to conserve energy and reduce costs through an electrical control center with timing mechanisms linking the pool owner’s air conditioning/heating, or HVAC unit, and the pool circulation and filtration system. This product does not come with a wireless radio; however, the device can be upgraded with a wireless radio in order to allow users to communicate with the Dashboard.

The BrioWave 175p Smart Energy Management Controller is our primary product and is ready for resale. Our role in the development of this technology has been in its design and development. BrioWave technology was conceived by our Chief Executive Officer, Shawn Davis. Our Chief Financial Officer, Tom Bianco, has been actively engaged in field testing and improving upon the technology through rigorous field testing in collaboration with our vendor. Both of our officers are actively engaged in the research and development of BrioWave technology. We design and develop the functionality grids and specifications for our technology which are then converted into computer code and embedded into the device by our vendor.

Finished units were delivered to us by our circuit board vendor in January 2013 for final inspection. On March 27, 2013, We received four units ready for resale which were delivered to a vendor. Sixteen additional units were delivered to the same vendor on April 30, 2013, fulfilling an order for resale. To date, none of the devices have been sold and pursuant to an agreement executed with the vendor, we have agreed to refund the entire amount of the purchase price paid by the vendor in exchange for the return of all of our devices that were initially delivered. Management believes the devices were unsold for a variety of reasons unrelated to the quality of our products. First, the vendor is an electrical supply warehouse and not generally known as a provider of pool products. Second, the vendor resells its electrical products primarily to electrical contractors. Finally, we produced a thirty-second commercial that was to be deployed in areas highly concentrated with residential pools, including, but not limited to, The Coachella Valley, Palm Springs, Palm Desert, La Quinta and Indio but we were unable to obtain the necessary capital to implement our marketing plan. The marketing plan was designed to create awareness and push customers towards this particular vendor.

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The BrioWave 175w Smart Energy Management Controller is our new wireless-enabled version of the controller. To date, we have completed hardware development on the product and we estimate we will need an additional $250,000 in capital and certain time to finalize engineer development components, including finalizing software that allows this device to communicate wirelessly for the purpose of transferring and depositing data to our server and database to be parsed and converted into graphical information for use in the Dashboard. The graphics portion of the Dashboard has been completed, including the components and basic programming that allow parameter setting fields to be changed, with the majority of work remaining to be completed confined to graphics, branding, skinning and the development of backend tools. This wireless version relies on software we purchased from a vendor; however, we are currently in default with such vendor due to delinquent payments. The vendor has not prevented us from using the software as of the date of this filing.

Our BrioWave technology utilizes commoditized components and prices are subject to supply, demand, availability, and market fluctuations. To the best of our knowledge, all BrioWave devices that have been installed to date in California, Arizona and Texas have been functioning uninterrupted.

Our BrioWEMS technology is based on our BrioWave solution and modified to control time of use and electricity consumption on well pumps. There is no difference between our BrioWEMS technology and our BrioWave technology other than slight configuration and set up changes. We anticipate developing a new product line based off this technology. To date, we have configured one device with the BrioWEMS technology. We recently installed this technology at a customer’s residential location to control energy usage to the water pump during certain periods of the day and thus far, this device has been functioning uninterrupted to the best of our knowledge.

Proposed Offering for Utility Integration

In November 2012, we participated in a pilot program with a major utility provider in the state of Texas. We installed 25 BrioWave Smart Energy Management Controller devices across multiple cities in the state of Texas. Pursuant to the agreement with the vendor, we agreed to allow the utility provider ownership of all data produced from the program. The purpose of the program was to investigate and validate our technology’s marketing claims and reliability, and to prove whether our technology could, in fact, reduce energy consumption, thus reducing overall energy costs for customers. We believe the program was highly successful and as a result, we plan to offer our technology to utility providers.

In the future, we plan to offer BrioWave technology to utility providers through large networked distributors. Our BrioWave 175w Smart Energy Management Controller technology comes standard with an onboard wireless transmitter, dipole antennae and a ZigBee socket that we can use to send data packets across the internet utilizing the customer’s residential home router, or configured to communicate through its onboard ZigBee wireless transmitter to communicate with the utility-installed smart meter. Data received by our server would then be parsed into a database and prepared for consumption in our server-hosted web browser, and available for review using key performance indicators and graphs. The web browser would allow consumers the option to change parameters or implement scheduling options on the device from any computer or mobile device. A second web browser would be available for utility providers to review and can be configured with triggers to disable or enable devices in a demand response configuration by city, state or zip code location. The web browser for utility providers could also include numerous key indicators such as total number of devices available online, access to total kW’s, line charts indicating average consumption time of day. We were able to test most of this technology during the Texas pilot program. Many of the devices have been re-installed in the state of California, Texas and Arizona. To date, we are unaware of any catastrophic failures on any of the installed devices. While the devices are outfitted with wireless transmitters, we have been unable to finish the software engineering required to make the web browser ready for market. We have completed hardware development on the product and we estimate we will need an additional $250,000 in capital and certain time to finalize engineer development components, including finalizing software that allows the devices to communicate wirelessly for the purpose of transferring and depositing data to our server and database to be parsed and converted into graphical information for use in the Dashboard by both retail and utility consumers.

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Solar Power Systems

In the future, we plan to offer custom solar power systems as a product offering. A solar power system allows residential and commercial buildings to use solar power to generate electricity for their respective dwelling or structure. Users will then produce clean, more affordable solar energy and save money on their respective energy production bills. Our BrioWave technology is designed to work collaboratively with solar power systems and “time of use” scheduling, where customers pay different rates depending on the time of day, weather, and the season. Our BrioWave technology has built-in functionality to prevent energy consumption during utility imposed or proposed “time of use” schedules when energy costs are typically higher. Our BrioWave technology could also be configured to work collaboratively with solar power systems to intelligently consume energy. We are working with investors and solar panel vendors to provide quality solar power systems that are eligible for depreciation benefits. We intend to rely on financing structures that monetize a substantial portion of those benefits and provide financing for the creation of our solar energy systems. We anticipate relying on these tax-advantaged financing structures. If we are unable to monetize those benefits through these arrangements, we may be unable to provide and maintain solar power systems for new customers on an economically viable basis.

In the future, our intended strategy is to offer structured financing to investors to help sell our solar power system product offerings based on the following proposed finance structures:

Proposed Sale-Leaseback Structure. Under sale-leaseback structures, we plan to generate cash through the sale of solar power systems to fund investors, and we propose to then lease these systems back from the investors and sublease them to our customers. For the duration of the lease term, we may, for some of the structures, receive the value attributable to the incentives and the long-term recurring customer payments, and we make leaseback payments to the fund investors. The fund investors would receive the customer payments after the lease term. The fund investors would also receive the value attributable to the investment tax credits, accelerated depreciation and other incentives. At the end of the lease term, we would have an option to purchase the solar power systems from the fund investors. Under this structure, our customers would make monthly lease payments that we recognize as revenue over the term of the subleases on a straight-line basis. Depending on the design, size and construction of the individual systems and the leaseback terms, we may recognize a portion of the revenue from the sale of the systems or we may treat the cash received from the sale as financing received from the fund investors and reflect the cash received as a sale-leaseback financing obligation on our condensed consolidated balance sheet.

Proposed Lease Pass-Through Structure. Under lease pass-through structures, we propose to lease solar power systems to fund investors under a master lease agreement, and these investors in turn sublease the solar energy systems to customers. We receive all of the value attributable to the accelerated tax depreciation. The investors typically make significant upfront cash payments which we classify and allocate between the right to the investment tax credits, which is a monetization activity, where applicable, and the future customer lease payments and other benefits assigned to the investor, which are recorded as a financing obligation. After the master lease term expires we receive the customer payments, if any. We record the solar power systems on our condensed consolidated balance sheet as a component of solar power systems, leased and to be leased—net. We record the amounts allocated to the investment tax credits as deferred revenue on our condensed consolidated balance sheet as the associated solar energy systems are placed in service. We then recognize the deferred revenue in our condensed consolidated statement of operations as revenue, by reducing the deferred revenue balance at each reporting date as the five-year recapture period expires. We record the balance of the amounts received from fund investors as lease pass-through financing obligations on our condensed consolidated balance sheet and subsequently reduce these obligations by the amounts received by the fund investors from U.S. Treasury Department grants, customer payments and the associated incentive rebates. We, in turn, will recognize the incentive rebates and customer payments as revenue over the customer lease term and amortize U.S. Treasury Department grants as a reduction to depreciation of the associated solar power systems over the estimated life of these systems.

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Our ability to provide solar power systems to customers on an economically viable basis will depend on our ability to locate fund investors and to finance these systems with fund investors who require particular tax and other benefits. As a result, we will need to enter into substantial financing arrangements to facilitate our customers’ access to our solar power systems, and if this financing is not available to us on acceptable terms, if and when needed, our ability to offer solar power systems and grow our business would be materially adversely impacted. Our future success on offering solar power systems will depend on our ability to raise capital from third-party fund investors to help finance the deployment of our residential and commercial solar power systems. Our strategy is to seek to reduce the cost of capital through these arrangements to improve our margins or to offset future reductions in government incentives and to maintain the price competitiveness of our solar power systems. If we are unable to establish new financing funds when needed, or upon desirable terms, to enable our customers’ access to our solar power systems with little or no upfront cost, we may be unable to finance installation of our customers’ systems, or our cost of capital could increase, either of which would have a material adverse effect on our business, financial condition and results of operations. To date, we have not raised any capital, nor have we entered into arrangements with fund investors or customers.

Market Opportunity

According to the Energy Information Agency, or EIA, in 2012, total sales of retail electricity in the United States were $363 billion. U.S. retail electricity prices have increased at an average annual rate of 1.5% and 3% from 2002 through 2013 for residential and commercial customers, respectively. Despite increasing U.S. retail electricity prices, U.S. electricity usage has continued to expand over the past decade.

Across the United States, many utility customers are paying retail electricity prices at or above an electricity price of 14.1 cents per kilowatt hour, or kWh. In dollar terms, 2011 data suggests a U.S. market size of $63 billion at an electricity price at or above 14.1 cents per kWh. Using historical annual growth rates for residential and commercial retail electricity prices for 2002 to 2012 and flat electricity consumption, the implied U.S. market size at or above 14.1 cents per kWh increases to $185 billion, or 1,069 TWh, by 2018.

As a result of rising energy prices, the market for energy efficiency solutions is expected to grow significantly and we believe we can fill a niche in this rapidly expanding market by providing low cost, energy saving technology and innovative solutions that use or complement BrioWave technology. According to an October 2012 report by Navigant Research, the energy efficient housing market will expand rapidly over the remainder of the decade, growing from an annual market value of $14 billion in 2012 to almost $84 billion by 2020. This sector consists primarily of the installation and deployment of energy efficiency products and services, including energy efficiency-related engineering, construction, services, technical support and equipment. We believe environmentally conscious consumers will, in particular, be interested in our product offerings.

Rising retail electricity prices, coupled with inelastic demand, create a significant and growing market opportunity for providers of lower cost retail energy. We aim to take advantage of this opportunity and sell products designed to reduce electrical consumption associated with residential pools. We believe our patented BrioWave technology may also represent an effective demand response solution for utilities and we are looking into ways to use our technology to save costs for owners of residential pools and to install residential and commercial solar power systems to leverage similar energy savings.

Our Approach

We have developed an integrated approach that could potentially allow our customers access to lower cost retail energy alternatives in a simple and cost-efficient manner. The key elements of our integrated approach are:

Sales. Develop a structured sales organization to efficiently engage prospective customers, from initial interest through customized proposals and, ultimately, result in signed contracts for products and services.

Financing. Provide pricing options to our customers to help make renewable, distributed energy and BrioWave technology affordable.

Engineering. We have developed hardware and software that potentially optimizes the energy production of each solar energy system.

Installation. We will work to obtain all necessary building permits and handle the installation of our solar energy systems. By managing these logistics, we believe we can make the installation process simple for our customers.

Monitoring and Maintenance. Our plan is to utilize our own software and other software from third party vendors to provide our customers with a real-time view of their energy generation, consumption and carbon offset through an easy-to-read application available on any device with a web browser.

Complementary Products and Services. Using our proprietary hardware and software, we analyze our customers’ energy usage and identify opportunities for energy efficiency improvements.

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Our Strategy

Our goal is to become a competitive provider of energy efficient solutions, demand response technology and of clean distributed energy worldwide. We aim to outfit every home with our Smart Energy Management Controllers and believe our product offerings will provide an alternative to traditional energy bills that is cleaner and less costly than most other energy providers. We do not currently have funding for any of these initiatives at this time. When funding becomes available, our plans are to:

Rapidly grow our customer base. We intend to invest significantly in sales, marketing and operations personnel and leverage strategic relationships with new and existing industry leaders to further expand our business and customer base.

Offer lower priced energy solutions. We plan on reducing the costs of our products by continuing to leverage our proprietary hardware and software to further ensure that our integrated team operates as efficiently as possible, and working with fund investors to develop innovative financing solutions to lower our cost of capital and offer the savings of lower-priced energy to our customers.

Leverage our brand and long-term customer relationships to provide complementary products. We plan to continue to invest in and develop complementary energy products, software and services, such as our BrioWave and BrioWEMS energy management technologies, to offer further cost-savings to our customers.

Expand into new locations. Our plan is to make the product commercially available and then we intend to soft launch and expand into new locations, initially targeting those markets where climate, government regulations and tax incentives position solar energy as an economically compelling alternative to utilities.

Growth Strategy

We do not currently have funding for any of these initiatives at this time. When funding becomes available, our growth strategy is to expand our business (i) through acquisitions of, or investments in, other companies with competing or complementary services, technologies or businesses; and (ii) by entering into relationships with other businesses in order to expand our service offerings, which could involve preferred or exclusive licenses, additional channels of distribution or discount pricing or investments in other companies. We are actively engaged in the process to identify additional acquisition candidates and negotiate transactions, which contribute increased cash earnings or generate top line revenue. We expect to fund our business expansion through the issuance of debt or equity securities, the payment of cash, the exchange of services, or any combination thereof.

Competition

The market for our products and services is competitive and rapidly changing, and the barriers to entry are relatively low. With the introduction of new technologies and the influx of new entrants to the market, we expect competition to persist and intensify in the future, which could harm our ability to increase sales, limit customer attrition and maintain our prices.

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Other companies, both public and private, could choose to enter our space and compete directly with us, or indirectly by offering substitute solutions. The result could be decreased demand or pricing for our services, longer sales cycles, or a requirement to make significant incremental investments in research and development to match these entrants’ new technologies. If any of these happens, it could cause us to suffer a decline in revenues and profitability.

Our principal competitors for our BrioWave technology include providers or producers of variable speed pool pumps, motors and controls for small, medium and large sized businesses such as Pentair, Zodiac, Hayward, Goldline and Intermatic. Our competitors for our solar power systems include Renova Solar, Verengo Solar and SolarCity.

Competition could result in reduced sales, reduced margins or the failure of our BrioWave products to achieve or maintain more widespread market acceptance, any of which could harm our business. While we do not compete currently with vendors serving larger customers and focus primarily on residential customers, we may face future competition from these providers if they determine that our target market presents an opportunity for them. Finally, in the future, we may experience competition from retailers reselling or refusing to market our products in lieu of other large established businesses having more leverage, such as Superior Pool Products, Leslie’s Swimming Pool Supplies or Pool Electrical Products. If these companies decide to develop, market or resell competitive Smart Energy Management Controllers, acquire one of our existing competitors or form a strategic alliance with one of our competitors, our ability to compete effectively could be significantly compromised and our operating results could be harmed. In addition, one or more of these resellers or other businesses could decide to offer a competitive product at a low cost in order to generate revenue as part of a larger product offering.

Our current and potential competitors may have significantly more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the development, promotion, sale and support of their products. Our current and potential competitors may have more extensive customer bases and broader customer relationships than we have. In addition, these companies may have longer operating histories and greater name recognition than we have and may be able to bundle products with other products that have gained widespread market acceptance. These competitors may be better able to respond quickly to new technologies and to undertake more extensive marketing campaigns. If we are unable to compete with such companies, the demand for our products could substantially decline.

We cannot assure you that we will be able to respond quickly, cost-effectively or sufficiently to market conditions. Our business, financial condition and operating results may be adversely affected if we are unable to anticipate or respond quickly and economically to any developments.

Our ability to compete will also depend on our ability to raise at least $4.3 million in capital to fund our business plan and continuing operations, the strength of our brand, the retention of key employees, our ability to attract key talent and other personnel, and the efficiency of our business development and marketing. All these activities require significant financial resources. We may not be able to sustain competition. Our inability to compete effectively would have an adverse impact on our business.

Sales and Marketing

We do not currently have funding for any of these initiatives at this time, our sales and marketing plans are dormant. When funding becomes available, our plans are to revise our sales and marketing plan. We expect to participate in trade shows, produce television commercials in those areas with high concentrations of residential pools, target consumers with existing solar power systems, or desiring new solar installations, as well as targeting alternative energy providers for the purpose of reselling or licensing our BrioWave technology.

Research and Development

We believe that our future success depends to a large degree on our ability to continue to conceive and develop new products and technologies to enhance the performance characteristics and methods of manufacture of existing and new products. We do not currently have funding for any of these initiatives at this time. Our research and development activities are dormant. When funding becomes available, our plans are to invest our own funds on research and development. For the years ended December 31, 2013 and 2012, research and development expenses, net amounted to $23,777 and $0, respectively; none of which was reimbursed by our customers.

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Intellectual Property

We rely, in part, upon patents, copyrights, trademarks, trade secrets and proprietary knowledge as well as personnel policies and employee confidentiality agreements concerning inventions and other creative efforts to develop and to maintain our competitive position. We plan to file for patents, copyrights and trademarks in the United States and in other appropriate countries to protect our intellectual property rights to the extent practicable. 

We primarily rely on one patent, U.S. Patent No. 7,777,366 B2, which was issued by the United States Patent and Trademark Office on August 17, 2010. Our patent is a utility patent that covers the technology’s ability to control loads. Using our technology, we are able to control loads when connected to both an air conditioner and a pool filter through load sensors. When connected to our technology, the pool filter system has a predetermined run time and is only operating when the air conditioner is not. When the air conditioner turns on, the load to the pool filter system is disconnected. When the air conditioner turns off, the load is returned to the pool filter which resumes running at the point in the run time where the pool filter had previously left off. This functionality is accomplished using load sensors to determine when a device is energized or not. The load control system provides a more efficient and better use of energy resources. Under the patent, our technology provides backwash functionality in a timed cycle through the pool filtration system by reading an inline pressure sensor switch and manipulating a series of valves.

On December 16, 2008, we filed our service mark, BrioWave, in standard characters with the United States Patent and Trademark Office. The service mark was first used in commerce on August 8, 2008 and filed for opposition by the United States Patent and Trademark Office on January 5, 2010.

Government Regulations

Our products and services are typically not subject to existing federal and state regulations in the U.S. governing the electric utility industry. However, if in the future we receive sufficient funding, our solar solution will be subject to oversight by the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Commission (NERC), and other regulatory entities under the Federal Power Act, and the individual Regional Transmission Owner or Independent System Operator approved tariffs and manuals. In addition, our products and their installation are subject to government oversight and regulation under state and local ordinances relating to communications requirements, building codes, public safety regulations pertaining to electrical connections and local and state licensing requirements. In the future, federal, state or local governmental entities or competitors may seek to change existing regulations, impose additional regulations or apply current regulations to cover our products and services.

Electric Utility Pricing and Related Regulations

We are impacted by electric utility pricing and related regulations. Utility pricing is administered through state agencies, typically public utility commissions, through formal proceedings involving the public, utilities, and various affected parties. Often, direct legislative mandates apply to specific issues. How these rules are structured and interpreted has a significant impact on the economic viability of our Company.

Employees

As of March 31, 2013, we had two employees in the United States, both of which are part-time. We rely on independent contractors for other aspects of our business and in particular, we rely on contracts with technical engineers from a primary vendor to assist us in the development of our Smart Energy Management Controllers.

We believe that our future success will depend in part on our continued ability to attract, hire or acquire and retain qualified independent contractors. There can be no assurance that we will be able to attract and retain such individuals. We believe we have good relations with our employees and independent contractors.

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ITEM 1A. RISK FACTORS.

An investment in our common stock involves a high degree of risk. Before making an investment decision, you should give careful consideration to the following risk factors, in addition to the other information included in this Annual Report. If any of these risks actually occur, our business, financial condition or results of operation may be materially adversely affected. In such case, the trading price of our common stock could decline and investors could lose all or part of their investment.

Risks Related to Our Company

Director Independence

We are not currently listed on any national securities exchange that has a requirement that our Board of Directors have an independent director. At this time, we do not have an “independent director” as that term is defined under the notes of the NASDAQ Capital Market. Thus, there is a potential conflict in that board members who are management will participate in discussions concerning management compensation and audit issues that may affect management decisions.

Risk of not being able to repay our “Secured Promissory Notes” on the date of maturity.

On June 21, 2013, The Company issued two Secured Promissory notes, both in the amount $55,000 each to two different investors (the “Secured Promissory Notes 1 and 2”). Both Secured Promissory Notes 1 and 2 have a maturity date of June 23, 2014 (Date of Maturity) and an annual interest rate of 12% per annum.  Secured Promissory Note 1 and 2 are collateralized by the Company’s Energy Forecasting and Management Device”, its only patent, Patent #7777366 issued by the United States Patent and Trademark Office (USPTO), including the associated source code which is not patented.  If we are unable to repay these debt obligations by the date of maturity, we risk forfeiture of the technology to these investors.  We may be unable to restructure this debt.  We believe that we have good relations with these investors, however, should default occur; they may be unwilling to work with us or negotiate a lease back or other terms for the use of this technology on conditions that are suitable to the company.  Our business and marketing plans are reliant on the use of our only patent.  Should this occur, we may be forced to wind down operations or into bankruptcy or liquidation proceedings.

There is substantial doubt about our ability to continue as a going concern as a result of our lack of revenues and if we are unable to generate significant revenue or secure financing, we may be required to cease or curtail our operations.

We are a development stage company. We have generated no significant revenues to date. Our auditors have raised substantial doubt as to our ability to continue as a going concern. Our business needs in total approximately $4,375,000 to fully implement our business plan. We have a Letter of Intent to secure ongoing funding from Beacon Global Partners, LLC at this time. The total amount is being negotiated. Pursuant to the Letter of Intent, we expect to have a binding Agreement with an amount within fifteen days of the filing of the Company’s 2013 Annual filing on Form 10-K. There is uncertainty regarding our ability to implement our business plan without additional financing. We have a history of operating losses, limited funds and no agreements, commitments or understandings. Our future success is dependent upon our ability to commence selling our products, generate cash from operating activities and obtain additional financing. There are no assurances that we will be able to continue selling our products, generate sufficient cash from operations, sell additional shares of common stock or borrow additional funds. Our inability to obtain additional cash could have a material adverse effect on our ability to continue in business and implement our business plan.

Our lack of operating history makes it difficult for an investor to evaluate our future business prospects.

We have a limited operating history. We have generated no significant revenues from the sales of our products. Our business plan is speculative and unproven. There is no assurance that we will be successful in executing our business plan or that even if we successfully implement our business plan, we will ever generate revenues or profits, which makes it difficult to evaluate our business. As a consequence, it is difficult, if not impossible, to forecast our future results. Because of the uncertainties related to our lack of operating history, it is more difficult for an investor to make an investment decision concerning our securities than if we were a profitable operating business.

We require financing and if such financing is not available on acceptable terms it could have a material adverse effect on our business and financial condition.

In June 2013, we entered into an equity line of credit with Dutchess Opportunity Fund II, LP that provides that Dutchess is committed to purchase from us, from time to time, up to $5,000,000 of our common stock over the course of thirty-six months from the first day following the effectiveness of a registration statement. We may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the related investment agreement (“Investment Agreement”), as soon as we have an effective registration statement in place. We have not yet filed a registration statement registering the shares and therefore, we have not yet sold any shares under the Investment Agreement and are unable to do so until the shares are registered. Accordingly, we are currently in default under the Investment Agreement with Duchess for not filing the registration statement and our equity line remains unavailable.

We do not have any arrangements with any bank or financial institution to provide additional financing and there can be no assurance that any such arrangement, if required or otherwise sought, would be available on terms deemed to be commercially acceptable and in our best interests. Also, if we raise additional funds by selling equity or equity-based securities, the percentage ownership of our existing stockholders will be reduced and such equity securities may have rights, preferences or privileges senior to those of the holders of our common stock. Any inability to obtain additional cash as needed could have a material adverse effect on our financial position, results of operations and ability to continue operations. 

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A material drop in the retail price of utility-generated electricity or electricity from other sources would harm our business, financial condition and results of operations.

We believe that a customer’s decision to buy renewable energy from us is primarily driven by their desire to pay less for electricity. The customer’s decision may also be affected by the cost of other renewable energy sources. Decreases in the retail prices of electricity from the utilities or from other renewable energy sources would harm our ability to offer competitive pricing and could harm our business. The price of electricity from utilities could decrease as a result of:

● the construction of a significant number of new power generation plants, including nuclear, coal, natural gas or renewable energy technologies;

● the construction of additional electric transmission and distribution lines;

● a reduction in the price of natural gas as a result of new drilling techniques or a relaxation of associated regulatory standards;

● the energy conservation technologies and public initiatives to reduce electricity consumption; and

● development of new renewable energy technologies that provide less expensive energy.

A reduction in utility electricity prices would make the purchase of our BrioWave technology and proposed solar power energy systems less economically attractive. In addition, a shift in the timing of peak rates for utility-generated electricity to a time of day when solar energy generation is less efficient could make our BrioWave product offerings less competitive and reduce demand for our products and services. If the retail price of energy available from utilities were to decrease due to any of these reasons, or others, we would be at a competitive disadvantage, we may be unable to attract new customers and our growth could be limited.

The products we sell and install have never been sold on a mass market commercial basis, and we do not know whether they will be accepted by the market.

The market for our BrioWave products for use by residential, commercial, industrial and governmental users is at a relatively early stage of development and the extent to which the products we sell and install will be widely adopted is uncertain. If these products are not accepted by the market, our business plans, prospects, results of operations and financial condition will suffer. Moreover, demand for the products we sell and install may not develop or may develop to a lesser extent than we anticipate. The development of a successful market for our products and our ability to sell our products at a lower price per watt may be affected by a number of factors, many of which are beyond our control, including but not limited to:

● the failure of our products to compete favorably against other similar energy conservation products on the basis of cost, quality and performance;

● our failure to develop and maintain successful relationships with suppliers of components of our products; and

● customer acceptance of our BrioWave technology.

If our proposed products fail to gain sufficient market acceptance, our business plans, prospects, results of operations and financial condition will suffer.

Because we depend and will depend upon third parties with whom we have no signed contracts for components used in manufacturing our product and for the manufacturing of our products, if these manufacturers or suppliers fail to perform or if we lose our relationships with these manufacturers or suppliers, our revenues could be reduced.

We will rely on various third party suppliers for the components used in the production of our swimming pool electronic control products and for the manufacturing of our products. Specifically, we are outsourcing all production, including, but not limited to, the design of our printed circuit board technology, firmware, and software assembly to MEC Northwest. We maintain tooling in Guangzhou, China for the purpose of manufacturing our polyethylene enclosure. We do not have any signed contracts pertaining to any of our manufacturing which exposes us to a greater risk of losing these suppliers or manufacturers than if we had written agreements.

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If we lose these suppliers, there can be no assurance that we will be able to negotiate new supplier or manufacturer agreements on acceptable terms, if at all, or that current or future supplier or manufacturer arrangements will be successful. With respect to any products supplied or manufactured by third parties, there can be no assurance that any third-party supplier will perform acceptably or that failures by third parties will not delay or impair our ability to deliver products on a timely basis, which could reduce our revenues.

Technological changes in our industry could render our BrioWave products obsolete, which could prevent us from achieving sales and market share.

If we or our suppliers fail to refine our, or their, technology and to develop and introduce new products could cause our, or their, products to become uncompetitive or obsolete, which could prevent us from increasing our sales and becoming profitable. The industry related to components using our Brio Wave products is rapidly evolving and highly competitive. Development efforts may be rendered obsolete by the technological advances of others, and other technologies may prove more advantageous for the commercialization of products using our products. If this occurs, our sales could be diminished.

We rely on access to software from a third party vendor the Company is in default with on an agreement.

As of December 31, 2013, the Company remains in default under the terms and conditions of an agreement for software usage provided by a vendor. The vendor has not previously prevented access to the software and continues to bill the Company for its respective monthly payments. The Company is not currently using the software and its purpose is related to the use of its graphical user interface, to display data, dashboards and control parameters. The user interface is a critical tool in the technologies use for its utility demand response application. If we are prevented from using this software, commercialization of our product for use by utility vendors may not materialize, or may delay its launch to market and delay or impair our ability to deliver products on a timely basis, which could reduce our revenues or render the technology obsolete. We have no assurances from the vendor that they will continue to allow us access to the use of this software.

Problems with product quality or product performance, including defects, in the BrioWave products we distribute and install could result in a decrease in customers and revenue, unexpected expenses and loss of market share.

Our BrioWave products may contain undetected errors or defects, especially when the products are first introduced. For example, components in our BrioWave products may contain defects that are not detected until after they are shipped or are installed because we cannot test for all possible scenarios. These defects may cause us to request that suppliers incur significant re-engineering costs, divert the attention of our personnel from product selling efforts and significantly affect our customer relations and business reputation. If we deliver components with errors or defects, or if there is a perception that our components contain errors or defects, our credibility and the market acceptance and sales of our products could be harmed. Similarly, if we deliver components with errors or defects, or if there is a perception that such components contain errors or defects, our credibility and the market acceptance and sales of our BrioWave products could be harmed. Furthermore, widespread product failures may damage our market reputation, reduce our market share, and cause sales to decline.

Like other retailers, distributors and manufacturers of products that are used by consumers, we face an inherent risk of exposure to product liability claims in the event that the use of the component products in our energy systems results in injury.

Our business may be subject to warranty and product liability claims in the event that our BrioWave technology fails to perform as expected or if a failure of our BrioWave technology results, or is alleged to result, in bodily injury, property damage or other damages. Because our BrioWave technology is used with products that involve the use of electricity, it is possible that our products could result in injury, whether by product malfunctions, defects, improper installation or other causes. Moreover, we may not have adequate resources in the event of a successful claim against us. We have no product liability insurance. In addition, quality issues can have various other ramifications, including delays in the recognition of revenue, loss of revenue, loss of future sales opportunities, increased costs associated with repairing or replacing products, and a negative impact on our goodwill and reputation, which could also adversely affect our business and operating results. Our business’ exposure to product liability claims is expected to increase significantly in connection with the implementation of our business plan.

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We rely on suppliers to comply with intellectual property, copyright, hazardous materials and processes and trade secrecy laws and regulations and, if such laws and regulations are not sufficiently followed, our business could suffer substantially.

We endeavor to comply with all law and regulation regarding intellectual property law, manufacturing process law and regulation, however, in many cases it is our supplier that must comply with such regulations and laws. Although we make efforts to ensure that products sourced from third parties comply with required regulation and law and that the operation of our suppliers do as well, our business could suffer if a supplier was, or suppliers were, found to be non-compliant with regulation and law in our, our customers’ or our suppliers’ jurisdictions.

Our inability to protect our intellectual property rights could allow competitors to use our property rights and technologies in competition against our Company, which would reduce our sales. In such an event we would not be able to grow as quickly as expected, and the loss of anticipated revenues will also reduce our ability to fully fund our operations and to otherwise execute our business plan.

We primarily rely on one patent, U.S. Patent No. 7,777,366 B2, issued by the United States Patent and Trademark Office (USPTO) on August 17, 2010. We rely in part, on copyright, trademark and trade secret laws, proprietary rights agreements, and non-disclosure agreements to protect our intellectual property. We cannot give any assurance that these measures will prove to be effective in protecting our intellectual property. We also cannot give any assurance that our existing patent will not be invalidated, that any patents that we currently or prospectively apply for will be granted, or that any of these patents will ultimately provide significant commercial benefits. Further, competing companies may circumvent any patents that we may ultimately hold by developing products which closely emulate but do not infringe our patents. We can give no assurance that we will be able to successfully defend our patents if and when received and proprietary rights in any action we may file for patent infringement. Similarly, we cannot give any assurance that we will not be required to defend against litigation involving the patents if and when received or proprietary rights of others, or that we will be able to obtain licenses for these rights. Legal and accounting costs relating to prosecuting or defending patent infringement litigation may be substantial.

We also rely on proprietary designs, technologies, processes and know-how not eligible for patent protection. We cannot give any assurance that our competitors will not independently develop the same or superior designs, technologies, processes and know-how.

We have a policy concerning proprietary rights with our employees giving us proprietary rights to certain technology developed by those employees while engaged by our Company; however, we can give you no assurance that courts of competent jurisdiction will enforce this policy.

Our lack of an established brand name and relative lack of resources could negatively impact our ability to effectively compete in the market for applications using our BrioWave technology, which could reduce the value of your investment.

We do not have an established brand name or reputation in the business of sales and installation of our BrioWave products. We also have a relative lack of resources to conduct our business operations. Thus, we may have difficulty effectively competing with companies that have greater name recognition and resources than we do. Our inability to promote and/or protect our brand name may have an adverse effect on our ability to compete effectively in the energy systems market.

Our management decisions are made by our management team, Shawn Davis and Thomas Bianco. If we lose their services, our revenues, if any, may be reduced.

Our success is dependent in part upon the availability of our executive officers. The loss or unavailability to us of either of Messrs. Davis or Bianco could have a material adverse effect on our business, prospects, financial condition and operating results. If Messrs. Davis or Bianco is not able to continue as an officer, our prospects could be adversely affected and, as a result, the loss of services of Mr. Davis or Mr. Bianco could materially adversely affect our operations. We have entered into employment agreements with each of Messrs. Davis and Bianco. We do not maintain key man insurance.

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Risks Related to our Convertible Notes

On January 30, 2013, the holder of Convertible Notes presented a demand for immediate payment

On January 30, 2013, the holder of Convertible Notes presented a demand for immediate payment, as provided in the terms of the notes, of an aggregate of $120,000, representing 150% of the remaining outstanding principal balance of Convertible Notes 1, 2, and 3, together with default interest under the terms of the Notes. Because we have failed to pay the remaining principal balance, together with accrued and unpaid interest, upon the maturity dates of Convertible Notes 1, 2, 3, 4 and 5 (collectively, the “Convertible Notes”), we are in default under the respective Convertible Notes. The Convertible Notes are held by the same holder. As of the date of this filing, we continue to work with the holder of the Convertible Notes, and though the holder of the notes has not threatened litigation, the incident rises to the level of potential threatened litigation. We anticipate the parties will be able to resolve the issue amicably. The holder of the Convertible Notes has continued to support us and has advanced certain additional funds to us beyond the date of the issuance of its demand letter that was received on January 30, 2013. The holder of the notes could pursue litigation, however, as of the date of this filing has not threatened to do so.

Existing stockholders could experience dilution upon the issuance of common stock pursuant to the conversion of our Derivative Financial Instruments (Convertible Notes)

Our Derivative Financial Instruments (Convertible Notes) contemplate the issuance of shares of our common stock to satisfy these debt obligations, subject to certain restrictions and obligations. Our existing stockholders’ownership could be diluted by such conversions. Consequently, the value of your investment may decrease. Our convertible notes provide the issuer with the following conversion terms.

Convertible Note 1. On September 2011, the Company issued a convertible promissory note in the amount of $42,500 to an investor (the “Convertible Note 1”). Convertible Note 1 had a maturity date of July 2012 and an annual interest rate of 8% per annum. The holder of Convertible Note 1 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. The convertible note has a variable conversion price of 58% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature.

Convertible Note 2. On January 5, 2012, the Company issued a second convertible promissory note in the amount of $42,500 to the same investor (the “Convertible Note 2”). Convertible Note 2 had a maturity date of July 2012 and an annual interest rate of 8% per annum. The holder of Convertible Note 2 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 2 has a conversion price of 58% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature.

Convertible Note 3. On December 3, 2012, the Company issued a third convertible promissory note in the amount of $3,000 to the same investor (the “Convertible Note 3”). Convertible Note 3 had a maturity date of September 5, 2013 and an annual interest rate of 8% per annum. The holder of Convertible Note 3 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 3 has a conversion price of 58% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature.

Convertible Note 4. On February 21, 2013, the Company issued a fourth convertible promissory note in the amount of $50,000 to the same investor (the “Convertible Note 4”). Convertible Note 4 had a maturity date of November 25, 2013 and an annual interest rate of 8% per annum. The holder of Convertible Note 4 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 4 has a conversion price of 50% representing a discount rate of 50% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature.

Convertible Note 5. On April 18, 2013, the Company issued a fifth convertible promissory note in the amount of $22,500 to the same investor (the “Convertible Note 5”). Convertible Note 5 had a maturity date of January 22, 2014 and an annual interest rate of 8% per annum. The holder of Convertible Note 5 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 5 has a variable conversion price of 45% representing a discount rate of 55% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature.

Convertible Note 6. On August 5, 2013, the Company issued a sixth convertible promissory note in the amount of $10,000 to the same investor (the “Convertible Note 6”). Convertible Note 6 has a maturity date of May 7, 2014 and an annual interest rate of 8% per annum. The holder of Convertible Note 6 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 6 has a variable conversion price of 35% representing a discount rate of 65% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature

We lost our office space; our business may adversely be impacted

On April 3, 2014, we lost our office space.  We are currently looking for suitable office space.  Losing our office space may disrupt our ongoing business. We have to store items that may not be available when needed, or which may result in loss. Sensitive information and tangible property may be at additional risk of being lost by not being stored in a centralized or secure location

Risks Related to Our Equity Line

The resale of the shares of common stock which may be issued under our equity line could depress the market price of our common stock and you may not be able to sell your investment for what you paid for it.

We intend to register the resale of up to $5,000,000 of our common stock in connection with our equity line, but have not yet filed a registration statement registering the shares. The sale of these shares into the public market by the investor could depress the market price of our common stock and you may not be able to sell your investment for what you paid for it.

Existing stockholders could experience dilution upon the issuance of common stock pursuant to the equity line.

Our equity line contemplates our issuance of shares of our common stock, subject to certain restrictions and obligations. If the terms and conditions of the equity line are satisfied, and we choose to exercise our put rights to the fullest extent permitted and sell shares of our common stock to the investor, our existing stockholders’ ownership will be diluted by such sales. Consequently, the value of your investment may decrease.

The equity line investor will pay less than the then-prevailing market price for our common stock under the equity line.

The common stock to be issued pursuant to the equity line, once we have an effective registration statement in place, will be purchased at a 5% discount to the lowest daily volume weighted average price, VWAP, of our common stock during the five consecutive trading day period beginning on the trading day immediately following the date of delivery of a put notice by us to the counterparty, subject to certain exceptions. The counterparty has a financial incentive to sell our common stock upon receiving the shares to realize the profit equal to the difference between the discounted price and the market price. If the investor sells the shares, the price of our common stock could decrease.

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We may not be able to access sufficient funds under the equity line when needed.

Our ability to put shares and obtain funds under the equity line is limited by the terms and conditions in the Investment Agreement, including restrictions on when we may exercise our put rights, restrictions on the amount we may put to the investor at any one time, which is determined in part by the trading volume of our common stock, and a limitation on the investor’s obligation to purchase if such purchase would result in them beneficially owning more than 4.99% of our common stock. Accordingly, the equity line may not be available to satisfy all of our funding needs. To date, we have not sold any shares under the Investment Agreement as we have not yet filed a registration statement registering the shares and accordingly, we are currently in default under the Investment Agreement. It is our understanding that, upon notice from us to sell shares to Dutchess under the Investment Agreement, Dutchess will begin selling shares in the open market and does not typically hold the shares purchased, if any, from us. However, once the registration statement is effective, the Investment Agreement does not require Dutchess to immediately sell the shares we issue to them.

Risks Related to our Common Stock

Trading in our common stock is limited and the price of our common stock may be subject to substantial volatility.

Our common stock (OTCBB: AURT) is quoted on the Over-the-Counter Bulletin Board, or the OTCBB. We expect our common stock to continue to be quoted on the OTCBB for the foreseeable future. Broker-dealers may decline to trade in OTCBB stocks given the market for such securities is often limited, the stocks are more volatile and the risk to investors is greater. These factors may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of their shares. This could cause our stock price to decline.

Additionally, the price of our common stock may be volatile as a result of a number of factors, including, but not limited to, the following:

● our ability to successfully conceive and to develop new products and services to enhance the performance characteristics and methods of manufacture of existing products;

● the fluctuation of sales by season as the history of swimming pool electronic control products indicates that our busiest delivery periods trends to be March through September;

● our ability to retain existing customers and customers’ continued demand for our products and services;

● the timing of our research and development expenditures and of new product introductions;

● the timing and level of acceptance of new products or enhanced versions of our existing products; and

● price and volume fluctuations in the stock market at large which do not relate to our operating performance.

Because our officers and directors control our activities, they may cause us to act in a manner that is most beneficial to them and not to outside shareholders, which could cause us not to take actions that outside investors might view favorably and which could prevent or delay a change in control.

Our executive officers and directors beneficially own approximately 42% as of April 14, 2014 of our outstanding common stock and 33.3% of our Class B preferred stock, of which the holders are entitled to twenty thousand votes per share. As the Class B preferred stock votes with common stock, our executive officers and directors collectively hold 33.3% of the voting rights of our Company. As a result, they effectively control all matters requiring director and stockholder approval, including the election of directors, the approval of significant corporate transactions, such as mergers and related party transactions. Our executive officers and directors also have the ability to delay or perhaps even block, by their ownership of our stock, an unsolicited tender offer. This concentration of ownership could have the effect of delaying, deterring, or preventing a change in control of our company that you might view favorably.

Changes to the Articles of Incorporation.

We filed a Definitive 14C Information Statement on January 29, 2013.  The Board of Directors believes that the increase in the number of authorized shares of Common Stock is in the best interests of the Company and its stockholders. The purpose of increasing the number of authorized shares of Common Stock is to have shares available for issuance for such corporate purposes as the Board of Directors may determine in its discretion, including, without limitation, conversion of convertible securities, future acquisitions, stock splits, stock dividends, future financings and other corporate purposes.  Existing stockholders will experience dilution upon the issuance of common stock pursuant to the conversion of our convertible notes which may decrease the value of your investment.

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“Penny stock” rules may make buying or selling our securities difficult which may make our stock less liquid and make it harder for investors to buy and sell our securities.

Trading in our securities is subject to the SEC’s “penny stock” rules and it is anticipated that trading in our securities will continue to be subject to the penny stock rules for the foreseeable future. The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends our securities to persons other than prior customers and accredited investors must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by these requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity of our securities and consequently adversely affect the market price for our securities.

ITEM 2. PROPERTIES.

On September 30, 2013, the lease on our office space located at 3700 E. Tahquitz Drive, Suite 117, Palm Springs, California expired. Our corporate headquarters, including our principal administrative, marketing, technical support, and research and development departments, are presently located in Palm Springs, California, in office and warehouse provided by the Coachella Valley Economic Partnerships (CVEP) iHub division at no cost to us. We have been assigned one office, consisting of approximately 1,000 feet, which has space suitable for assembling and storage of our technology. Due to inactivity, we have agreed to move out of our office space at the accelerator campus on April 4^th, 2013 with the CVEP iHub division. On April 3, 2014, we moved out of this space. The Company is in the process of locating suitable office space for our current operations.

ITEM 3. LEGAL PROCEEDINGS.

Dispute with Vendor

In March 2010, we engaged the services of a vendor to complete certain services. Pursuant to the agreement, we paid the vendor a total of $70,618 towards the completion of services. The agreement contained a “not to exceed cost” of $89,435. On or about September 21, 2010, we issued the vendor 250,000 shares of our restricted Class A common stock as an incentive for the vendor to deliver services no later than March 1, 2011. The vendor agreed to incrementally deliver work in progress; however, no work was received from the vendor. The vendor requested an additional payment of $18,818, which we did not pay. On or about October 4, 2011, the vendor repudiated the agreement. On February 23, 2011, we engaged the services of legal counsel and made written demand for the return of the stock certificate and attempted to initiate settlement negotiations. The vendor did not acknowledge receipt of our demand.

On September 25, 2011, we received notice of a Chapter 7 bankruptcy case filed personally by the vendor. We have placed a stop order on the certificate we issued on or about September 21, 2010 to the vendor. As of this date hereof, we are currently conferring with counsel regarding possible litigation to cancel the stock certificate. Our alleged damages resulting from the vendor’s failure to perform and subsequent repudiation of the contract, including our lost opportunity costs, should we pursue litigation against the vendor, will need to be established by an economic expert. The vendor could conceivably pursue litigation against us for the $18,818 payment; however, we believe it is not probable and therefore, a contingent liability for the amount is not warranted.

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Potential Legal Dispute with Wakabayashi Fund, LLC

On or about July 30, 2013, Wakabayashi Fund, LLC sent an email advertisement to us marketing certain financial services, and we responded to request further information. In subsequent telephone conversations, Mr. Stone of Wakabayashi Fund, LLC (the “Fund”) stated that he was a finance professional that previously held a high position in a well-known securities firm and regularly provides services for the purpose of funding public companies, and/or finding good companies for his clients to invest in. After several weeks, and during two telephone conversations with our executive officers, Mr. Stone stated that several of his close colleagues with whom he had a pre-existing relationship had reviewed our corporate information, agreed to invest immediately in us, and were imminently prepared to send checks to us, but that he would not advise them to do so until after we issued and delivered a stock certificate for 750,000 shares of our common stock to the Fund. After Mr. Stone assured our executive officers that the investment was assured, imminent and forthcoming, and that we would be receiving the first of many investment checks from accredited investors within a certain time period after the Fund received the stock certificate, we agreed to process the now pending stock certificate. We negotiated the size of the stock certificate based on the amount of money Mr. Stone claimed the Fund would deliver in the time period and based on promises he allegedly secured from pre-existing relationships, amounting to an aggregate of $100,000 - $200,000 in funds that he stated would begin arriving to us within the first few weeks. We indicated an urgent need for capital and believed Mr. Stone would fulfill the promise that was bargained for. As of the date of this report, no funds or offers to provide funds for us have been forthcoming from any person claiming any relationship with the Fund or Mr. Stone. We believe Mr. Stone’s statements were false and made to induce management into delivering the stock certificate. On May 17, 2013, we were notified by our transfer agent that the Fund was attempting to clear a stock certificate. We notified our transfer agent to place a stop order on the transaction. On or about July 2, 2013, we received an email from our transfer agent with a letter from the Fund’s counsel. On or about July 10, 2013, we responded to the Fund’s counsel detailing the facts set forth above and indicated we would not process the certificate for 750,000 shares of our common stock, but in an effort to resolve this matter quickly and efficiently, we offered to issue the Fund 50,000 shares of common stock. On September 24, 2013, we received a letter from our transfer agent’s counsel in regards to a civil complaint filed by the Fund, naming our transfer agent as a defendant, requesting issuance of the stock certificate for 750,000 unrestricted shares of our common stock. The Company has not been named in the lawsuit, but we are prepared to litigate the matter if necessary. As of December 31, 2013 the 750,000 shares remains issued and outstanding.

Default on Convertible Promissory Note

On January 30, 2013, the holder of Convertible Notes presented a demand for immediate payment, as provided in the terms of the notes, of an aggregate of $120,000, representing 150% of the remaining outstanding principal balance of Convertible Notes 1, 2, and 3, together with default interest under the terms of the Notes. Because we failed to pay the remaining principal balance, together with accrued and unpaid interest, upon the maturity dates of Convertible Notes 1, 2, 3, 4 and 5 (collectively, the “Convertible Notes”), we are in default under the respective Convertible Notes. The Convertible Notes are held by the same holder. As of the date of this filing, we continue to work with the holder of the Convertible Notes. We anticipate the parties will be able to resolve the issue amicably. The holder of the Convertible Notes has continued to support us and has advanced certain additional funds to us beyond the date of the issuance of its demand letter. The holder of the notes could pursue litigation, however, as of the date of this filing has not threatened to do so.

Default of Agreement with vendor for Software

As of December 31, 2013, we remain in default under the terms and conditions of an agreement with a software vendor. The vendor has not previously prevented access to the software and continues to bill us for its respective monthly payments. We are is not currently using the software. Due to insignificant revenue and lack of future contract, we recognized full impairment of $74,269 related to the software license as of the balance sheet date of December 31, 2012

We, on occasion, may also be involved in other legal matters arising in the ordinary course of our business. While management believes that such matters are currently insignificant, matters arising in the ordinary course of business for which we are or could become involved in litigation may have a material adverse effect on our business, financial condition or results of operations.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

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PART II

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

Our common stock (OTCBB: AURT) is quoted on the Over-the-Counter Bulletin Board, or OTCBB. Accordingly, there can be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of our common stock to sell our common stock, or the prices at which holders may be able to sell our common stock. The following table provides the high and low bid price information for our common stock for the periods indicated which reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

	Bid Prices
	High		Low
	($)		($)
For the Fiscal Year Ended December 31, 2013
First Quarter ended March 31, 2013	$	0.01	$0.01
Second Quarter ended June 30, 2013	$	0.01	$0.01
Third Quarter ended September 30, 2013	$	0.01	$0.01
Fourth Quarter ended December 31, 2013	$	0.03	$0.06
For the Fiscal Year Ended December 31, 2012
First Quarter Ended March 31, 2012	$	0.12	$0.08
Second Quarter Ended June 30, 2012	$	0.14	$0.08
Third Quarter ended September 30, 2012	$	0.10	$0.06
Fourth Quarter ended December 31, 2012	$	0.10	$0.10

Holders

As of March 31, 2014, we had approximately 331 holders of record of our common stock. Holders of record include nominees who may hold shares on behalf of multiple owners.

Dividend Policy

Common Stock

We have not paid any cash dividends on our common stock and do not plan to pay any such dividends in the foreseeable future. We currently intend to use all available funds to develop our business. We can give no assurances that we will ever have excess funds available to pay dividends or that we will pay such dividends, if we do.

Preferred Stock

The Class B Participating Cumulative Preferred Super-voting Stock owned by certain of our officers and directors pays a cumulative dividend at 6%. For the years ended December 31, 2013, 2012, 2011, 2010 and 2009, our Board of Directors did not declare any dividends and dividends will not be declared until we have sufficient cash from profits to do so. Total undeclared Class B Participating Cumulative Preferred Super-voting Stock dividends as of December 31, 2013 was $130,987.

Recent Sales of Unregistered Securities

We did not issue any unregistered equity securities during the quarter ended December 31, 2013.

Securities Authorized for Issuance under Equity Compensation Plans

The following table summarizes information about our equity compensation plan as of December 31, 2013.

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Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders	-	$	-	3,200,000
Equity compensation plans not approved by security holders	-	$	-	-
Total	-	$	-	-

2010 Equity Incentive Plan

In June 2010, we registered 4,000,000 shares under our 2010 Equity Incentive Plan. No shares have been issued to date under the Plan. The Equity Incentive Plan is intended to compensate Employees for services rendered. The Employees who will participate in the 2010 Equity Incentive Plan have agreed or will agree in the future to provide their expertise and advice to us for the purposes and consideration set forth in their written agreements pursuant to the 2010 Equity Incentive Plan. The services to be provided by the Employees will not be rendered in connection with: (i) capital-raising transactions; (ii) direct or indirect promotion of our Class A Common Shares; (iii) maintaining or stabilizing a market for our Class A Common Shares. The Board of Directors may at any time alter, suspend or terminate the Equity Incentive Plan.

As of December 31, 2010, 800,000 shares were approved under this plan for issuance by the Board of Directors. 200,000 shares each were approved for issuance to Shawn Davis, Thomas Bianco, Paul Davis and Raymond Tai. As of December 31, 2013, the balance sheet date, none of the shares under this plan were granted or issued.

ITEM 6. SELECTED FINANCIAL DATA.

As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with the Financial Statements and Notes thereto, and other financial information included elsewhere in this Annual Report on Form 10-K. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains descriptions of our expectations regarding future trends affecting our business. The following discussion sets forth certain factors we believe could cause actual results to differ materially from those contemplated by the forward-looking statements.

Overview

We are an environmentally conscious, socially responsible company aiming to develop and provide smart products that eliminate inefficiencies and reduce energy consumption. Our products are focused around our patented, proprietary BrioWave technology. We currently focus on two lines of business: building products for energy efficient solutions for owners of residential swimming pools and building products for residential and commercial solar power systems.

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Currently, our main focus is on designing products, using our patented, proprietary BrioWave technology, that are intended to promote energy conservation and to save costs for owners of residential swimming pools. Our products are also designed to prevent potential costly maintenance problems from occurring in swimming pool filtration systems.

During 2013, we accomplished several significant milestones, including:

● In 2013, we raised $12,500 in equity to continue our operations.

● We installed two BrioWave devices for a vendor in the state of California.

● We completed major enhancements to our corporate website, www.attunertd.com.

● We launched our BrioWave product website, www.briowave175.com.

● We installed our first residential solar energy system and it has been successful as of the date of this report.

● We installed a BrioWEMS Smart Energy Management Controller at a residential location and it has been successful as of the date of this report.

● We completed and produced a thirty second commercial complete with testimonials ready for television.

● On February 21, 2013, the Company issued a fourth convertible promissory note in the amount of $50,000

● On April 18, 2013, the Company issued a fifth convertible promissory note in the amount of $22,500

● On August 5, 2013, the Company issued a sixth convertible promissory note in the amount of $10,000

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition presented in this section is based upon our financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. We believe that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential impact on our financial statements and, therefore, consider these to be our critical accounting policies. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses, allowance for accounts receivable, purchase price fair value allocation for business combinations, estimates of depreciable lives and valuation of property and equipment, valuations of discounts on debt, valuation of beneficial conversion features in convertible debt, valuation and amortization periods of intangible assets, valuation of goodwill, valuation of stock based compensation and the deferred tax valuation allowance. We based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Stock Based Compensation

We adopted ASC 718-20-10, “Share Based Payment,” which establishes the financial accounting and reporting standards for stock-based compensation plans. As required by ASC 718-20-10, we recognize the cost resulting from all stock-based payment transactions including shares issued under our stock option plans in the financial statements. Stock based compensation is measured at fair value at the time of the grant.

Valuation of Long-Lived and Intangible Assets and Goodwill

Pursuant to the ASC 350-10-05, “Goodwill and Other Intangible Assets and the Impairment or Disposal of Long-lived Assets,” we assess the impairment of identifiable intangibles, long-lived assets and goodwill annually or whenever events or circumstances indicate that the carrying value of these assets may not be recoverable. Factors we consider include and are not limited to the following:

● significant changes in performance relative to expected operating results;

● significant changes in the use of the assets or the strategy of our overall business; or

● significant industry or economic trends

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As determined in accordance with the ASC, if the carrying amount of goodwill of a reporting unit exceeds its fair value, the impairment loss is measured as the amount by which the carrying amount exceeds the fair market value of the assets. In accordance with the ASC, in determining if impairment exists, we estimate the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. The impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair market value of the assets.

Revenue Recognition

We recognize revenue when the following criteria have been met: persuasive evidence of an arrangement exists, the fees are fixed or determinable, no significant company obligations remain, and collection of the related receivable is reasonably assured.

We recognize revenues in the same period in which they are incurred from our business activities when goods are transferred or services rendered. Our revenue generating process consists of the sale of our proprietary technology or the rendering of professional services consisting of consultation and engineering relating types of activity within the industry. Our current billing process consists of generating invoices for the sale of our merchandise or the rendering of professional services. Typically, invoices are accepted by vendor and payment is made against the invoice within 60 days upon receipt.

Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. Our fiscal year-end is December 31.

Use of Estimates

The preparation of these financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We regularly evaluate estimates and assumptions related to valuation and amortization policies on property and equipment and valuation allowances on deferred income tax losses. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Basic and Diluted Net Income (Loss) Per Share

We compute net income (loss) per share in accordance with FASB codification standards. The standard requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. We adopted FASB codification regarding the required tax asset benefit computations for net operating losses carry forward. The potential benefits of net operating losses have not been recognized in these financial statements because we cannot be assured it is more likely than not we will utilize the net operating losses carried forward in future years.

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Impairment of Long-Lived Assets

In accordance with ASC 360-10, “Property Plant and Equipment,” we test long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Long-lived assets held and used by us are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. Recoverability is assessed using undiscounted cash flows based upon historical results and current projections of earnings before interest and taxes. Impairment is measured using discounted cash flows of future operating results based upon a rate that corresponds to the cost of capital. Impairments are recognized in operating results to the extent that carrying value exceeds discounted cash flows of future operations. We recognized impairment losses of $0 and $74,269 on the impairment of patent, trademarks and software assets during 2013 and 2012, respectively.

Results of Operations

We are a development stage company with limited revenues. We recorded $950 in revenues for the year ended December 31, 2013.

Revenue

Our revenues for the year ended December 31, 2013 decreased 49% to $950 as compared to revenues of $1,877 for the same period in the prior year. The decrease in revenues for 2013 was primarily caused by our focus on commercializing our first product for use in the Texas and Southern California markets. Provided that we are successful in obtaining sufficient funding, we expect our revenues to grow as we intended to launch our products into the marketplace.

Operating Expenses

During the year ended December 31, 2013, our operating expenses increased by approximately $383,144, or 44%, as compared to the same period in the prior year. The decrease in operating expenses for 2013 was attributed primarily to lower general and administrative expenses incurred, and lower legal expenses and compensation paid.

Advertising Expense

Advertising expense primarily consists of expenses related to design, print, and promotion of future products. Our advertising expense for the year ended December 31, 2013 decreased to $750 from $36,700 reported for the same period in the prior year.

Net Loss

We reported a net loss for the year ended December 31, 2013 and 2012 of $1,360,596 and 953,445 and our net loss per share was $.03.

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Liquidity and Capital Resources

In 2013, we used $242,493 in cash for operations. The cash used in operations consisted of our net loss of $1,360,596, offset by items including expenses related to common and preferred stock granted for services of $649,750,the increase of accounts payable and accrued expenses of $355,909, and the recognition of the change in value of our derivative liability of $21,240.

In 2013, we were provided $242,493 of cash in financing activities, including $12,500 received from the sale of common stock, and $231,936 in borrowings.

In 2013, we had a working capital deficit of $1,341,608, which consisted of $254,915 in account payable and accrued liabilities, $401,456 in accrued salaries, a convertible note payable of $155,502, derivative liability of $169,785 and other liabilities of $359,950.

In 2012, we used $434,260 in cash for operations. The cash use consisted of our net loss $953,445 offset by items including stock granted for services of $200,890, the impairment of our software for $74,269, and the recognition of our derivative liability of ($38,946).

In 2012, we were provided $190,123 of cash in financing activities including $153,000 received from the sale of common stock, and $55,684 in loans.

In 2012, we had a working capital deficit of $731,606, which consisted of $124,217 in accounts payable, $181,538 in accrued salaries, a convertible note payable of $120,304, debt due to related party of $10,184, derivative liability of $110,828, and other accrued liabilities of $184,535.

To remain operational through the next twelve months, we will need to improve our cash flows. In June 2013, we entered into an Investment Agreement with Dutchess Opportunity Fund II, or Dutchess, whereby Dutchess is committed to purchase from us, from time to time, up to $5,000,000 of our common stock over the course of thirty-six months from the first trading day following the effectiveness of a registration statement. We have not yet filed a registration statement registering the shares. Accordingly, we are currently in default under the Investment Agreement and the equity line remains unavailable. As soon we have an effective registration statement, we may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Investment Agreement. We intend to file the registration statement with the Securities and Exchange Commission in the upcoming months so that we can establish our equity line.

We are currently in negotiations with Beacon Global Partners, LLC for the purpose of seeking additional financing in order to fund our operations and carry out our business plan for the next twelve months. We anticipate executing a final agreement in the upcoming months. We do not have any arrangements with any banks or financial institution to provide additional financing and there can be no assurance that any such arrangement, if required or otherwise sought, would be available on terms deemed to be commercially acceptable and in our best interests. Also, if we raise additional funds by selling equity or equity-based securities, the percentage ownership of our existing stockholders will be reduced and such equity securities may have rights, preferences or privileges senior to those of the holders of our common stock. Any inability to obtain additional cash as needed could have a material adverse effect on our financial position, results of operations and ability to continue operations. If we are not able to establish and draw upon our equity line, or we fail to secure other financing and we are not generating positive cash flow, we will consider other options, including curtailing operations.

Our management has also been focused on raising additional capital, developing relationships with distributors to resell BrioWave technology, and launching the first of our products into the marketplace. If we are unable to improve our cash flow, we may need to raise additional funds through equity or debt financings. If required, additional financing may not be available on terms that are favorable to us, if at all. Any equity financing may be dilutive to our existing shareholders. If we are unsuccessful in our attempts to increase cash flows to cover our expenditures or raise additional funds in a financing, we may not be able to remain operational over the next twelve months.

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Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCOURSES ABOUT MARKET RISK.

As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our financial statements are included at the end of this report.

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

We maintain “disclosure controls and procedures,” as the Securities and Exchange Commission (“SEC”) defines such term. We have designed these controls and procedures to reasonably assure that information required to be disclosed in our reports filed under the Exchange Act, such as this Annual Report on Form 10-K, is recorded, processed, summarized, and reported within the periods specified in the SEC’s rules and forms. We have also designed our disclosure controls to provide reasonable assurance that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow them to make timely decisions regarding our required disclosures.

Our management has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of December 31, 2013. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our Company’s disclosure controls and procedures, including the accumulation and communication of disclosures to our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure, were not effective as of December 31, 2013 to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. Based on this evaluation, we have concluded that there are material weaknesses in our disclosure controls and procedures and they were not effective for the following reasons:

1. We do not have an audit committee – While we are not legally obligated to have an audit committee, it is the management’s view that such a committee, including an audit committee financial expert, is important for control purposes. Currently, the Board of Directors acts in the capacity of the audit committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities Our Chief Financial Officer does not act in this capacity.

2. We did not maintain appropriate cash controls – As of December 31, 2013, we have not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and we did not require dual signature on our Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that we had limited transactions in our bank accounts.

3. We did not implement appropriate information technology controls – As of December 31, 2013, we retained copies of all financial data and material agreements; however, there is no formal procedure or evidence of normal backup of our data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.

4. Due to our small size, we do not have segregation of accounting or management duties which is a deficiency in our disclosure controls. We are currently working on acquiring certain resources to cure this deficiency.

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Accordingly, we concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by our internal controls.

As a result of the material weaknesses described above, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2013 based on criteria established in Internal Control—Integrated Framework issued by COSO.

We are working to develop sustainable processes of our own and have made progress towards completion of this effort; however, the lack of capital and our relatively small size has made it difficult for us to quickly design, implement and test sustainable processes adequate to remediate the notated material weaknesses. To address and remediate the material weaknesses in internal control over financial reporting described above, we have taken the following steps:

1. Appropriate Cash Controls. We are working on maintaining appropriate cash controls and we now require two signatures when signing and issuing checks.

2. Segregation of Accounting and Management Duties; Implementation of Appropriate Technology Controls. We have begun to break up auxiliary patterns, dividing functions such as bookkeeping and accounting into separate steps. Additionally, we have begun the process of implementing a process intended to segregate the accounting and bookkeeping duties from management duties. First, we have implemented a cloud computing accounting software system. Our Chief Executive Officer and Chief Financial Officer provide the documentation for sales or other transactions, and upload the documents to a cloud computing accounting software system for processing by a third party vendor. Our Chief Executive Officer and Chief Financial Officer still maintain oversight. We have also begun the process to reconcile other discrepancies through audit and assistance from our auditors.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2013. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework. As a result of its review, management identified material weaknesses in our internal control over financial reporting as described above. Based on this evaluation, our management concluded that, as of December 31, 2013, our internal control over financial reporting was not effective. Management acknowledges that as a smaller reporting entity, it is difficult to have adequate accounting staff to perform appropriate additional reviews of the financial statements.

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Changes in Internal Control over Financial Reporting

Other than as described above, there have been no changes in our internal control over financial reporting, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

Entry into Material Agreement

On April 2, 2014, we entered into a Letter of Intent (the “LOI”) with Beacon Global Partners, LLC, a Wyoming limited liability company (“BGP”). The LOI is precedent to a formal binding Change of Control Agreement which is expected to be finalized in the upcoming months. Under the LOI, BGP will assume majority control of the Company in exchange for ongoing capital financing an amount to be determined. Pursuant to the LOI, and only until, after receiving full funding to continue operations through the close date of March 31, 2015, BGP will be issue preferred stock providing them with at least 51% voting control of the Company. No assets of the Company are being sold. Our Board of Directors has determined that it is in the best interests of our Company and our shareholders to change majority control of the Company to BGP. As of the date hereof, BGP, LLC holds 0% of the voting securities of our Company.

The parties have agreed to a closing date of March 31, 2015 (the “Closing Date”), we have agreed to use our best efforts to affect a change of majority control of the Company, subject to the terms and conditions of the LOI. To the best of our knowledge, the source of BGP’s funding will originate from friends and family and private placements.

No later than the Closing Date, provided all of the terms and conditions of the LOI are met, the parties agree that BGP will obtain majority control of the Company, including but not limited to, control of our business plans and our intellectual property held as of the date of the LOI.

Once the terms and conditions of the LOI have been satisfied, Messrs. Davis and Bianco have each agreed to forgive and cancel any and all amounts of accrued interest reported and carried on our balance sheet generated from Messrs. Davis and Bianco’s preferred stock holdings, and to surrender their respective preferred stock holdings in full to the Company treasury for cancellation.

As part of the LOI, BGP has agreed to a Stock Purchase Agreement in the amount of $400,000 (the “SPA”) to each of Messrs. Davis and Bianco for the purchase of 3,000,000 shares of Class A common stock from each of the executives’ personal stock holdings. BGP will be responsible for the payment of any gross-up or tax payments resulting from the sales, and these additional payments will be owed to each of Messrs. Davis and Bianco in addition to the compensation amount and any other agreed-upon compensation due to Messrs. Davis and Bianco. Pursuant to the LOI, Messrs. Davis and Bianco have agreed to suspend their existing respective employment and severance agreements with the Company. The parties have agreed that BGP will continue to pay an annualized consultancy compensation of $120,000 to each of Messrs. Davis and Bianco until the earlier of the Closing Date or the date when the terms and conditions of the LOI are satisfied. As of the date of this filing, both Davis and Bianco have received $59,000 in compensation each towards this amount. Such annualized consultancy compensation may be deferred, but must be paid in full on, or before, BGP assumes control of the Company. At such time as when the terms and conditions of the LOI have been satisfied, Messrs. Davis and Bianco have agreed to terminate their existing respective employment and severance “Agreements’ with the Company and forgive the entire amounts of their accrued deferred compensation as of the date of the LOI, excluding the annualized Consultancy compensation of $120,000 discussed in the LOI.

The LOI also provides for certain changes to the officers of the Company and our Board.

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Pursuant to the LOI, Messrs. Davis and Bianco have agreed to conditionally resign as Chief Executive Officer and Chief Financial Officer, respectively, of the Company, effective as of the filing of the Company’s Annual 2013 Form 10-K report to the SEC, on or about April 15, 2014. Messrs. Davis and Bianco have each agreed to continue to serve as consultants on an as-needed basis to the Company and to provide such duties and responsibilities as requested by BGP in writing. Messrs. Davis and Bianco will continue to serve as members of our Board of Directors.

Effective as of the filing of the Company’s Annual 2013 Form 10-K report to the SEC, on or about April 15, 2014, Kenneth Miller is conditionally appointed as our Chief Executive Officer and a member of our Board of Directors. Effective as of the filing of the Company’s Annual 2013 Form 10-K report to the SEC, on or about April 15, 2014, Sam Starr is conditionally appointed as our Chief Operating Officer and a member of our Board of Directors. Our Board of Directors will now consist of Messrs. Davis, Bianco, Miller, and Starr.

The LOI also contains certain terms and conditions regarding late payments by BGP. BGP will have a thirty-day grace period to cure non-payment or late payments for amounts owed under the LOI. If the default is not cured pursuant to the terms of the LOI, BGP has agreed to, among other things: (a) terminate the LOI; (b) forfeit all Company and Board of Director Positions; (c) and to make certain default payments to Messrs. Davis and Bianco. In the event of termination of the LOI, any and all amounts made to Messrs. Davis and Bianco will be deemed non-refundable under any circumstances.

As required to be disclosed by Item 403(c) of Regulation S-K, other than as disclosed above, there are no arrangements, known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company.

The foregoing description of the LOI is qualified in its entirety by reference to the full text of the LOI, which is filed as Exhibit 10.1 to this 2013 Annual Report on Form 10-K, and incorporated herein by reference.

Amendment to the Letter of Intent from Beacon Global Partners, LLC dated April 1, 2014

On April 8, 2014 the parties agreed to amend the LOI such that each board member would have the following weight attached to their voting rights, Davis 30%, Bianco 30%, Miller 20% and Starr 20%. Collectively, Davis and Bianco will hold 60% of the majority vote. Miller and SP will collectively hold 40% of the minority vote until such time as BGP, is able to close or the agreement terminates pursuant to the terms and conditions of the LOI.

The foregoing description of the “Amendment to the Letter of Intent” is qualified in its entirety by reference to the full text of the “Amendment to the Letter of Intent”, which is filed as Exhibit 10.0 to this 2013 Annual Report on Form 10-K, and incorporated herein by reference.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective as of the filing of this 2013 Annual Report on Form 10-K with the SEC, on or about April 15, 2014, Shawn Davis resigned from his position as our Chief Executive Officer. He will remain a member of our Board of Directors. There are no disagreements between us and Mr. Davis.

On that same date, our Board of Directors appointed Kenneth Miller as our Chief Executive Officer and a member of our Board of Directors. Mr. Miller will receive an annual base salary of $185,000, and will be eligible to participate in benefit programs offered by us, including medical, dental, vision, and retirement plans on the same terms as our other executives.

Effective as of the filing of this 2013 Annual Report on Form 10-K with the SEC, on or about April 15, 2014,, Thomas Bianco resigned from his position as our Chief Financial Officer. He will remain a member of our Board of Directors. There are no disagreements between us and Mr. Bianco. No replacement for Mr. Bianco’s former position has been named at this time.

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Effective as of the filing of this 2013 Annual Report on Form 10-K with the SEC, on or about April 15, 2014, our Board of Directors appointed Sam Starr as our Chief Operating Officer and a member of our Board of Directors. Mr. Starr will receive an annual base salary of $185,000, and will be eligible to participate in benefit programs offered by us, including medical, dental, vision, and retirement plans on the same terms as our other executives.

Messrs. Miller and Starr were appointed as officers of the Company and members of our Board pursuant to the terms of the LOI. If BGP defaults under the Agreement, Messrs. Miller and Starr have agreed to resign from their respective Company and Board positions.

Kenneth Miller

Kenneth Miller has built an executive career by being a strategist, innovator and tactical leader who has been able to deliver business development and branding programs that have produced explosive growth and unprecedented profitability. Mr. Miller is a driver of transformational programs that have gained executive buy in, built internal support at all levels and created cross-functional teams that have delivered exceptional results. While being fiscally conscious, he is a creative problem solver and risk-taker, with a record of issue discovery and resolution success that has resulted in exceptional bottom-line growth.

With over 20 years of executive leadership, most of Mr. Miller’s career has been spent in the media industry. He started in the media industry in 1981 in small market America and has since worked in the Midwest, Southeast and most recently in San Francisco. Considered a turn-around specialist, Mr. Miller was a key contributor to bottom line profitability by positively impacting revenue growth by 44% and resulting in a 35% profit margin in his first year at Sinclair in New Orleans, all while integrating three different corporate cultures into one. He effectively transitioned operational activities that resulted in a 20% increase in market penetration in less than a year at MC Media Radio Group. In one of his most recent positions, he formulated innovative, distinctive, and successful initiatives that resulted in a 42% increase in profit margins through revenue growth and cost reduction.

Mr. Miller was involved in the political arena with candidates in Pennsylvania and again in California upon leaving the media industry in 2008, after nearly 30 years. He has been an advertising manager, campaign manager and candidate himself. As a candidate, energy and water resources were his highest priorities. It was during his campaign that he became aware of our Company.

He most recently served as the founder of Beacon Global Group, LLC, a company established for assisting corporations through capital investment, merger and acquisition negotiations, and manufacturing support. There, he negotiated the intricate acquisition of a U.S. water technology company by an Asian company.

Mr. Miller, 54, was born in Williamsport, PA, and grew up in suburban Los Angeles and Washington D.C. He studied marketing and business at King’s College in Wilkes-Barre, PA, and Lycoming College in Williamsport, PA. and currently resides in San Francisco.

Samuel Starr

Samuel Starr began his professional career in the retail industry as a young man, responsible for new store acquisitions and operations for a national dry goods chain. He handled all aspects of opening new stores, including training of employees with an emphasis on attention to detail, as well as public and customer relations for the stores during their first few weeks of operation. Mr. Starr remained in retail for the next 20 years working in management and executive positions.

In 1970, Paul F. Crouch, Founder, and President of Trinity Broadcasting Network (TBN) contacted Mr. Starr about helping him develop the first Christian Television Network. He was one of seven people originally responsible for putting the network on the air. The first station went on the air in 1972 in Southern California and Mr. Starr developed the cable and satellite network that now beams programs to satellites worldwide and has allowed the network to grow to over 18,000 television and cable affiliates globally, making TBN the largest religious broadcaster in the world and one of the largest broadcasters in the world along with Time Warner and Disney.

While at TBN, Mr. Starr was instrumental in the development along with Scientific Atlanta (now Cisco) and marketing of the first “transportable uplink” that would launch a new industry and changed the way people watched television forever.

In 1982, Mr. Starr started his own consulting firm dedicated to helping new broadcast licensees, cable operators and satellite programmers build, program and run their stations, cable systems and networks.

Mr. Starr, 69, was born in Hanford, CA, and grew up in California and New Mexico. He served in the United States Air Force during the Vietnam War. He was United States Airman of the Year in 1967 and assigned to the Pentagon. He is married. He currently resides in San Jose, CA.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATION GOVERNANCE.

Identification of Directors and Executive Officers

Set forth below is certain information with respect to the individuals who are our executive officers and/or directors as of December 31, 2013. The Board of Directors elects our executive officers annually.

Name	Age	Position(s)
Shawn Davis	44	Chief Executive Officer/Chairman of the Board of Directors
Thomas Bianco	49	Chief Financial Officer/Treasurer/Director

Board Composition. Our Board is currently composed of two directors. Each director is elected for the term of one year, and until his successor is elected and qualified, or until his earlier resignation or removal.

Biographies and Qualifications of Our Executive Officers and Directors. The biographies of our executive officers and directors and certain information regarding each director’s experience, attributes, skills and/or qualifications that led to the conclusion that the individual should be serving as an executive officer and/or director of our Company are as follows:

Shawn Davis was appointed our Chief Executive Officer and Chairman of our Board of Directors in June 2007 and is the co-founder of our current business operations. Mr. Davis is also the owner of S.D. Electric, a position he has held since 1995 and currently holds today. From March 2005 to 2007, he worked for Davis Companies as Vice President of Operations. From 1998 to 2002, Mr. Davis was employed by El Monte Unified High School District as a school teacher. He earned a B.S. in business from Azusa Pacific University in 1997 and obtained a C-10 Electrical Contractors License in 1995. In 2009, he obtained a certificate from “Boots on the Roof” as a certified photovoltaic installer. Mr. Davis is a valuable member of our Board due to his depth of electrical and engineering experience and knowledge of our industry.

Thomas Bianco was appointed our Chief Financial Officer, Treasurer and a member of our Board of Directors in June 2007 and is the co-founder of our current business operations. From June 1994 through October 2011, he was the sole proprietor of Bianco & Son Fine Jewelry & Collectables, a retail jewelry store. Mr. Bianco is the principal managing member of Pawnshield Fine Jewelry & Loan, a position he has held since June 2012. He received a Gemologist Degree from the Gemological Institute of America in December 1994. In December 2005, he received a Bachelor’s Degree in business science (BSB/M) from University of Phoenix and in May 2007, he received a Master’s Degree in business administration (MBA) from Colorado State University. Mr. Bianco is a valuable member of our Board due to his depth of management experience.

Family Relationships among Officers and/ or Directors

Our Secretary, Timothy Smith, is Shawn Davis’ father-in-law.

Other Involvement in Certain Legal Proceedings

None of our directors or executive officers has been involved in any bankruptcy or criminal proceedings, nor have there been any judgments or injunctions brought against any of our directors or executive officers during the last ten years that we consider material to the evaluation of the ability and integrity of any director or executive officer.

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Procedure for Nominating Directors

There have been no material changes to the procedures by which security holders may recommend nominees to our Board of Directors.

The Board of Directors will consider candidates for director positions that are recommended by any of our stockholders. Any such recommendation should be provided to our Secretary. The recommended candidate should be submitted to us in writing addressed to our Secretary, c/o Attune RTD, Inc., 3111 Tahquitz Canyon Way, Palm Springs, CA, 92263. The recommendation should include the following information: name of candidate; address, phone and email address of candidate; a statement signed by the candidate certifying that the candidate wishes to be considered for nomination to our Board of Directors and stating why the candidate believes that he or she would be a valuable addition to our Board of Directors; a summary of the candidate’s work experience for the prior five years and the number of shares of our stock beneficially owned by the candidate.

We do not have a separately designated nominating committee in light of resource allocations made by the Board of Directors in its business judgment. The Board will evaluate the recommended candidate and shall determine whether or not to proceed with the candidate in accordance with our procedures. We reserve the right to change our procedures at any time to comply with the requirements of applicable laws.

Committees of the Board of Directors

The Board of Directors has the responsibility for establishing broad corporate policies and reviewing our overall performance rather than day-to-day operations. The Board’s primary responsibility is to oversee management of our Company and, in so doing, serve the best interests of our Company and our stockholders.

We expect our Board, in the future, to appoint an audit committee, nominating committee and compensation committee, and to adopt a charter relative to each such committee. We intend to appoint such persons to committees of the Board as are expected to be required to meet the corporate governance requirements imposed by a national securities exchange, although we are not required to comply with such requirement until we elect to seek listing on a national securities exchange.

Audit Committee and Audit Committee Financial Expert

The Board of Directors does not have a separately designated audit committee. The functions of the audit committee are conducted by the entire Board. We do not currently have an “audit committee financial expert,” as defined in Item 407(d)(5)(ii) of Regulation S-K.

Code of Ethics

Our Board has adopted a Code of Ethics that applies to all of our employees, including our Chief Executive Officers and Chief Financial Officer. Although not required, the Code of Ethics also applies to our Board. The Code of Ethics provides written standards that we believe are reasonably designed to deter wrongdoing and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, full, fair, accurate, timely and understandable disclosure and compliance with laws, rules and regulations, including insider trading, corporate opportunities and whistle-blowing or the prompt reporting of illegal or unethical behavior. We will provide a copy of the Code of Ethics to any person without charge, upon request. The Code of Ethics Code for Senior Executives and Financial Officers is also posted on our website at www.attunertd.com under the “Investor Information” tab. The request for a copy of our Code of Ethics can be made in writing to our Secretary, c/o Attune RTD, Inc., 3111 Tahquitz Canyon Way, Palm Springs, CA, 92263.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities and Exchange Act of 1934, as amended, requires our officers, directors and persons who beneficially own more than 10% of a registered class of our securities (the “Reporting Persons”) to file reports of beneficial ownership and changes in beneficial ownership with the Securities and Exchange Commission on Forms 3 (Initial Statement of Beneficial Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual Statement of Beneficial Ownership of Securities) with the SEC. Reporting Persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of reports provided to us by our officers and directors, we believe that, during the year ended December 31, 2013, none of our Reporting Persons complied with the applicable reporting requirements under Section 16(a) of the Securities Exchange Act of 1934.

Our executive officers, Shawn Davis and Thomas Bianco, each filed a Form 4 regarding his receipt of a restricted stock award received on February 20, 2013 as compensation for service on April 9, 2014, 413 days late. The transaction was reported on Form 10-Q, filed on May 15, 2013.

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ITEM 11. EXECUTIVE COMPENSATION.

The following table reflects all compensation for our fiscal years ended December 31, 2013 and 2012 awarded to, earned by, or paid to our Chief Executive Officer and our Chief Financial Officer, both of which are referred to herein as the “Named Executive Officers.” No other executive officer earned over $100,000 in the last completed fiscal year.

Summary Compensation Table for the Fiscal Years Ended December 31, 2013 and 2012

Name and Principal Position	Year Ended Dec. 31,		Salary ($)			Bonus ($)		Stock Awards ($) (1)		Reduction in Accrued Payroll for Payments Received on Ford Trucks ($)			Nonequity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)		Total ($)
Shawn Davis Chief Executive Officer and		2013		185,000	(2)		0		300,000		(20,000	) (5)	0	0	23,358.30	(4)	488,358.30	(2)
Chairman of the Board		2012		120,000			0		0		0		0	0	0		120,000
Thomas Bianco Chief Financial Officer,		2013		185,000	(3)		0		300,000		(20,000	) (5)	0	0	23,358.30	(4)	488,358.30	(3)
Treasurer and Director		2012		120,000			0		0		0		0	0	0		120,000

(1) In this column, the figure represents the amount recognized by the executive during this period for financial statement reporting purposes only and is not compensation earned by the executive. The fair value of each restricted stock award is amortized to expense on a straight-line basis over the vesting period of the restricted stock award. The aggregate grant date fair value of the stock award was calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See the Notes to our Financial Statements contained elsewhere in this annual report on Form 10-K for a discussion of all assumptions made by us in determining values of our stock awards.

(2) $65,000 of the amount of salary represented in the table is considered accrued but unpaid compensation due to Mr. Davis, our Chief Executive Officer. Effective December 3, 2012, we entered into an employment agreement with Mr. Davis. The agreement provided for an annual base salary of $185,000; however, we have been unable to pay the newly established base salary for Mr. Davis due to cost-savings measures effected by the Board.

(3) $65,000 of the amount of salary represented in the table is considered accrued but unpaid compensation due to Mr. Bianco, our Chief Financial Officer. Effective December 3, 2012, we entered into an employment agreement with Mr. Bianco. The agreement provided for an annual base salary of $185,000; however, we have been unable to pay the newly established base salary for Mr. Bianco due to cost-savings measures effected by the Board.

(4) $9,000 of this amount was received as non refundable compensation on November 9, 2013 from BGP, LLC to each Davis and Bianco for work related services. $14,358.30 of this amount was received in the form of automobile payments made on behalf of each officer.

(5) Davis and Bianco reduced their deferred payroll amounts by $20,000 each, in exchange for payments made on the vehicles and the assumption of the remaining debt obligation owed on the vehicles  

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Narrative to Summary Compensation Table

Employment Agreements

On March 26, 2008, we entered into certain employment arrangements with Shawn Davis, our Chief Executive Officer, and Thomas Bianco, our Chief Financial Officer. These arrangements established a respective annual salary of $120,000 for Messrs. Davis and Bianco. Because Messrs. Davis and Bianco have been, and are currently, employed by us in critical managerial positions, we believe it to be in the best interests of our Company to provide Messrs. Davis and Bianco with certain severance protections and accelerated option vesting in certain circumstances. Effective December 3, 2012, we entered into four-year term employment agreements and severance agreements with Messrs. Davis and Bianco. The terms of the employment agreements are substantially similar and establish an annual base salary of $185,000 for each of Messrs. Davis and Bianco, and also provide for certain employee benefits, when we are financially able to provide for such benefits or as determined by the Board of Directors. As Messrs. Davis and Bianco comprise our entire Board of Directors, there is a potential conflict in that Messrs. Davis and Bianco therefore are setting their own executive officer compensation.

The terms of the severance agreements are substantially similar and provide for aggregated severance amounts equal to 300% of Messrs. Davis and Bianco’s annual base salary in effect as of the date of the executive’s respective date of termination (the “Severance Amount”). In addition to the Severance Amount, we agreed to provide Messrs. Davis and Bianco with full medical, dental, and vision benefits from the date of termination through the third full year following the respective date of termination. We also agreed Messrs. Davis and Bianco shall have one year from the respective date of termination in which to exercise all options that are vested as of the date of termination, subject to any trading window requirements or other restrictions imposed under our insider trading policy. The severance agreements state that if during the period of time during which Messrs. Davis and Bianco is employed by us a “change of control,” as defined in the severance agreement, occurs, 100% of the unvested portion of all options held by Messrs. Davis and Bianco as of the date of such “change of control” event shall be deemed vested and the executive shall be entitled to exercise such options.

We also agreed that if the payments are deemed “golden parachute” payments under the Internal Revenue Code of 1984 and either of Messrs. Davis and Bianco is obligated to pay an excise tax, we will reimburse Messrs. Davis and Bianco in full for both the amount of the excise tax, or ordinary income taxes owed in connection with the payment.

As of December 31, 2013, we had not paid Messrs. Davis and Bianco their respective new annual salaries of $185,000 and accordingly, we owed Messrs. Davis and Bianco accrued and deferred compensation in the amounts of $200,701 and $200,755, respectively.

Outstanding Equity Awards at Fiscal Year-End Table for the Year Ended December 31, 2013

The following table shows grants of options outstanding on December 31, 2013, the last day of our fiscal year, to each of the Named Executive Officers named in the Summary Compensation Table.

Option Awards

Name (a)	Number of securities underlying unexercised options exercisable (#)	Number of securities underlying unexercised options unexercisable (#)	Option exercise price ($)	Option expiration date
Shawn Davis	-	-	-	-
Thomas Bianco	-	-	-	-

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Profit Sharing and 401(k) Plan

We do not have a defined contribution 401(k) profit sharing plan.

Director Compensation

Our Board of Directors is currently comprised of two individuals, Messrs. Davis and Bianco, who also serve as our executive officers. The compensation of Messrs. Davis and Bianco is reflected in the Summary Compensation Table above.

Narrative to Director Compensation Table

We have no formal or informal arrangements or agreements to compensate our directors for services they provide as our directors. Messrs. Davis and Bianco did not receive any compensation during the year ended December 31, 2013 for their respective services as members of our Board of Directors.

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

Security Ownership of Certain Beneficial Owners and Management

The following tables set forth certain information related to the beneficial ownership, as of December 31, 2013, of our Class B Participating Cumulative Preferred Super voting Stock and common stock owned by the following persons: (i) all persons who is known by us to own beneficially more than 5% of our securities, (ii) all of directors, (iii) our Named Executive Officers and (iv) our executive officers and directors as a group. The information on beneficial ownership in the table and footnotes thereto is based upon data furnished to us by, or on behalf of, the persons listed in the table.

We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of the securities that they beneficially own, subject to applicable community property laws.

In computing the number of shares of securities beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of securities subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days after December 31, 2013. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.

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Class B Participating Cumulative Preferred Super voting Stock

Name and address	Amount and nature of beneficial ownership	Percentage of class beneficially owned (1)
Care Of Shawn Davis 3111 Tahquitz Canyon Way Palm Springs, CA 92263	200,000(1)	20%
Care Of Thomas Bianco 3111 Tahquitz Canyon Way Palm Springs, CA 92263	133,333(1)	13.33%
Timothy Smith 73557 Two Mile Road 29 Palms, CA 92277	133,333(1)	13.33%
Rena Davis Indio, CA	133,333(1)	13.33%
Raymond Kwok Cheung Tai 1564 Berkshire Court. San Marcos. CA 92069	133,333(1)	13.33%
Shawn Steib 3050 LARAMIE ROAD, RIVERSIDE, CA, 92506,	133,333(1)	13.33%
Steve Bailey 6444 EAST SPRINGS STREET, #301, LONG BEACH, CA, 90815	133,333(1)	13.33%

(1) As of December 31, 2013, we had 1,000,000 shares of our Class B Participating Cumulative Preferred Super voting Stock authorized, of which 999,998 are issued and outstanding. Upon formation of the Company, the holders received preferred shares in exchange for certain services. Each share of Class B preferred stock entitles the holder to one hundred votes, either in person or by proxy, at meetings of shareholders. The holders are permitted to vote their shares cumulatively as one class with the common stock. The Class B Participating Cumulative Preferred Super-voting Stock pays dividends at 6%.

(2) Renna Davis is Shawn Davis’ mother. Tim Smith is Shawn Davis’ father in law

Stockholders Known by Us to Own Over 5% of Our Common Stock

Name and address	Amount and nature of beneficial ownership	Percentage of class beneficially owned (1)
Beacon Global, LLC 236 West Portal Ave., #320 San Francisco, CA 94127	3,259,375	7.5%
Raymond Kwok Cheung Tai 1564 Berkshire Court. San Marcos. CA 92069	3,145,714 (2)	7.3%

(1) On March 31, 2014, we had 43,312,429 shares of our common stock issued and outstanding.

(2) Mr. Tai is an affiliate, and handles the mold induction enclosure with our vendor in Guangzhou, China

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Common Stock Owned by Officers and Directors

		Amount of beneficial ownership (2)						Percent of
Name and address of beneficial owner (1)	Nature of beneficial ownership	Shares Owned		Shares – Rights to Acquire		Total Number		Shares Beneficially Owned (3)
Shawn Davis (4)	Chief Executive Officer and Chairman of the Board		9,039,281		0		9,039,281		21	%
Thomas Bianco (5)	Chief Financial Officer and Director		9,039,281		0		9,039,281		21	%
All directors and executive officers as a group (2 persons)			18,078,562		0		18,078,562		42	%

(1) Unless otherwise stated, the address of each beneficial owners listed on the table is c/o Attune RTD, Inc., 3111 Tahquitz Canyon Way, Palm Springs, CA.

(2) Represents shares with respect to which each beneficial owner listed has or will have, upon acquisition of such shares upon exercise or conversion of options, warrants, conversion privileges or other rights exercisable within 60 days of December 31, 2013, sole voting and investment power.

(3) On March 31, 2014, we had 43,312,429 shares of our common stock issued and outstanding. Percentages are calculated on the basis of the amount of issued and outstanding common stock plus, for each person or group, any securities that such person or group has the right to acquire within 60 days of March 31, 2014 pursuant to options, warrants, conversion privileges or other rights.

(4) Mr. Davis is our Chief Executive Officer, President and a member of our Board of Directors. Mr. Davis beneficially owns 9,039,281 shares of common stock. Additionally, Mr. Davis owns 200,000 shares of Preferred stock with no underlying warrants or options

(5) Mr. Bianco is our Chief Financial Officer and a member of our Board of Directors. Mr. Bianco beneficially owns 9,039,281 shares of common stock. Additionally, Mr. Bianco owns 133,333 shares of Preferred stock with no underlying warrants or options.

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

Certain Relationships and Related Transactions

It is our policy that all employees, officers and directors must avoid any activity that is or has the appearance of conflicting with the interests of our Company. Our Board conducts a review of all related party transactions for potential conflict of interest situations on an ongoing basis and all such transactions relating to executive officers and directors must be approved by the full Board. In carrying out this responsibility, the Board has determined that we have the following related party transactions:

● Messrs. Davis and Bianco, our Chief Executive Officer and Chief Financial Officer, respectively, contributed a total of $4,647 in cash to be used for the respective January, February and March 2013 payments for two Company vehicles used by Messrs. Davis and Bianco. Messrs. Davis and Bianco do not expect to be repaid by us and therefore, the contribution of $4,647 was considered contributed capital to us. On June 8, 2013, we discharged the two Ford F150 vehicles, and all claims of ownership along with the entire remaining debt obligations owed on each vehicle to each of Messrs. Davis and Bianco respectively. Both vehicles were purchased under the officers name personally, and both Davis and Bianco have signed waivers releasing the Company from making any further monthly payments, and that the Company is not responsible for any default. Both vehicles were purchased personally by and registered to each of Messrs. Davis and Bianco for business use in a pilot program we participated in with a major utility provider. We began making payments of $755.70 beginning on June 6, 2011 for the vehicle purchased by Mr. Davis and ended making payments on December 2012. We began making payments of $755.70 beginning on June 6, 2011 for the vehicle purchased by Mr. Bianco and ended making payments on December 2012. Messrs. Davis and Bianco have agreed to reduce their deferred payroll amounts by $20,000 each in exchange for the assumption of the remaining debt obligations owed on the respective vehicles. The transaction resulted in no gain or loss and was reflected as additional paid in capital. Each officer received $14,358 in total during this time frame.

● On March 4, 2013, the Company amended its Articles of Incorporation to amend the Class B Preferred shares such that voting rights of Class B shareholders are increased from one hundred votes per share to twenty thousand votes per share. Our executive officers and directors beneficially own approximately 42% of our outstanding common stock and 33.3% of our Class B preferred stock. As a result, they effectively control all matters requiring director and stockholder approval, including the election of directors, the approval of significant corporate transactions, such as mergers and related party transactions. Our executive officers and directors also have the ability to delay or perhaps even block, by their ownership of our stock, an unsolicited tender offer. This concentration of ownership could have the effect of delaying, deterring, or preventing a change in control of our company that you might view favorably.

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● On July 23, 2012, the father-in-law of our Chief Executive Officer, Timothy Smith loaned us $10,000 for working capital. The loan was non-interest bearing. In exchange for the loan, we issued Mr. Smith an unsecured promissory note with a face value of $10,000 (the “2012 Note”). On July 23, 2013, pursuant to the terms of the 2012 Note, we converted the debt underlying the 2012 Note into shares of our common stock at a conversion price of $0.02 per share and issued Mr. Smith 500,000 shares of our restricted common stock to satisfy our obligations pursuant to the 2012 Note. On July 23, 2013, Mr. Smith loaned us an additional $10,000 for working capital. The loan was non-interest bearing. In exchange for the loan, we issued Mr. Smith an unsecured promissory note (the “2013 Note”). On July 25, 2013, pursuant to the terms of the 2013 Note, we converted the debt underlying the 2013 Note into shares of our common stock at a conversion price of $0.02 per share and issued Mr. Smith 500,000 shares of our restricted common stock to satisfy our obligations pursuant to the 2013 Note.

● We entered into a stock grant agreement with our then Chief Technology Officer, Huiyou Zhu, on December 10, 2011 and agreed to compensate Mr. Zhu in stock for his services. Mr. Zhu has not been an active officer of our Company since April 2012. As of October 1, 2013, the stock grant agreement has been placed on hold until such time as when we have the required capital to resume development on the server and wireless code at which point in time we will again reengage Mr. Zhu’s services and payment for services under the stock grant agreement.

Director Independence

We are not currently listed on any national securities exchange that has a requirement that our Board of Directors have an independent director. At this time, we do not have an “independent director” as that term is defined under the rules of the NASDAQ Capital Market. Thus, there is a potential conflict in that board members who are management will participate in discussions concerning management compensation and audit issues that may affect management decisions.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Independent Registered Public Accounting Firm Fees

On January 10, 2013, our Board of Directors ratified the engagement of M&K CPAs, PLLC to serve as our principal independent public accounting firm and to audit our financial statements for the years ended December 31, 2013 and 2012. The aggregate fees billed to us for professional accounting services, including the audit of our annual consolidated financial statements by our principal accountant for the fiscal years ended December 31, 2013 and 2012 included in our Form 10-K, are set forth in the table below.

	2013		2012
	($)		($)
Audit Fees (1)		24,250		18,500
Audit Related Fees		1,028		0
All Other Fees		25,755		17,609
Tax Fees		0		0
Total Fees		51,033		36,109

———————

(1) Audit fees – These fees are related to the audits of our annual financial statements included in our Form 10-K filings and the review of our interim quarterly financial statements included in our Form 10-Q filings, comfort letters, consents and assistance with and review of documents filed with the SEC.

Pre-Approval Policies

Our Board has not adopted a procedure for pre-approval of all fees charged by our independent auditors. The Board approves the engagement letter of our principal independent public accounting firm with respect to audit, tax, review services, and other services. 100% of the above services and fees were reviewed and approved by the Board either before or after the respective services were rendered.

37

PART IV

ITEM 15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Exhibit No.	Description
3.1	Certificate of Articles of Incorporation, dated December 19, 2011 (filed as Exhibit 3.1 to the S-1 filed December 8, 2009, and incorporated herein by reference).
3.2	Certificate of Amendment to Articles of Incorporation, dated January 1, 2007 (filed as Exhibit 3.2 to the S-1 filed December 8, 2009, and incorporated herein by reference).
3.3	Certificate of Amendment to Articles of Incorporation, dated November 28, 2007 (filed as Exhibit 3.3 to the S-1 filed December 8, 2009, and incorporated herein by reference).
3.4	Certificate of Amendment to Articles of Incorporation, dated March 21, 2008 (filed as Exhibit 3.5 to the S-1/A filed February 11, 2010, and incorporated herein by reference).
3.5	Bylaws adopted August 10, 3009 (filed as Exhibit 3.4 to the S-1 filed December 8, 2009, and incorporated herein by reference).
3.6	Certificate of Amendment to Articles of Incorporation, dated August 31, 2011 (filed as Exhibit 3.1 to the 10-K filed April 8, 2013, and incorporated herein by reference).
3.7	Certificate of Amendment to Articles of Incorporation, dated July 10, 2013 (filed herewith).
10.1	Securities Purchase Agreement with Asher Enterprises, dated December 3, 2012 (filed herewith).
10.2	Employment and Severance Agreement with Shawn Davis, dated December 3, 2012 (filed herewith).
10.3	Employment and Severance Agreement with Thomas Bianco, dated December 3, 2012 (filed herewith).
10.4	Demand Letter issued by Asher Enterprises January 30, 2013 (filed herewith).
10.5	Securities Purchase Agreement by and between the Company and Asher Enterprises dated February 21, 2013(filed herewith).
10.6	Letter of Engagement by and between the Company and Anubis Partners dated February 26, 2013 (filed herewith).
10.7	Securities Purchase Agreement by and between the Company and Asher Enterprises dated April 18, 2013 (filed herewith).
10.8	Unsecured Promissory Agreement by and between the Company and Timothy Smith dated June 7, 2013 (filed herewith).
10.9	Secured Promissory Note by and between the Company and Mines dated June 21, 2013 (filed herewith).
10.10	Warrant Grant Agreement by and between the Company and Mines dated June 21, 2013 (filed herewith).
10.11	Secured Promissory Note by and between the Company and Twenty08, LLC dated June 21, 2013 (filed herewith).
10.12	Warrant Grant Agreement by and between the Company and Twenty08, LLC dated June 21, 2013 (filed herewith).
10.13	Investment Agreement by and between the Company and Dutchess Opportunity Fund, II, LP, dated June 26, 2013 (filed herewith).
10.14	Registration Rights Agreement by and between the Company and Dutchess Opportunity Fund, II, LP, dated June 26, 2013 (filed herewith).
10.15	Securities Purchase Agreement by and between the Company and Asher Enterprises dated August 5, 2013 (filed herewith).
10.16	Letter of Intent from Beacon Global Partner, dated April 2, 2014 (filed herewith).
10.17	Amendment to Letter of Intent from Beacon Global Partner, dated April 8, 2014 (filed herewith).
99.0	Kenneth J. Miller, Curriculum Vitae (filed herewith).
99.1	Sam Starr, Curriculum Vitae (filed herewith).
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	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 (filed herewith).
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101.INS	XBRL Instance Document (filed herewith).
101.SCH	XBRL Taxonomy Extension Schema Document (filed herewith).
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).
101.LAB	XBRL Taxonomy Extension Label Linkbase Document (filed herewith).
101.PRE	XBRL Taxonomy Presentation Linkbase Document (filed herewith).

* In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this annual report on Form 10-K shall be deemed “furnished” and not “filed”.

38

Financial Statement Index

	Page
Report of Independent Registered Public Accounting Firm	F-1
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets	F-3
Statements of Operations	F-4
Statement of Changes in Stockholders’ Equity (Deficit)	F-5
Statements of Cash Flows	F-8
Notes to Financial Statements	F-10

39

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Attune RTD

(A Development Stage Company)

We have audited the accompanying balance sheets of Attune RTD (A Development Stage Company) as of December 31, 2013 and 2012, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended and for the period from January 1, 2010 to December 31, 2013. The financial statements for the period from July 14, 2007 (Inception) to December 31, 2009 were audited by other auditors whose report expressed an unqualified opinion on those statements with an explanatory paragraph expressing substantial doubt about the Company’s ability to continue as a going concern. These financial statements are the responsibility of the Company's management. 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes 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 internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes 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 financial statements referred to above present fairly, in all material respects, the financial position of the Attune RTD as of December 31, 2013 and 2012, and the results of its operations and its cash flows for the years then ended and for the period from January 1, 2010 to December 31, 2013 in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that Attune RTD will continue as a going concern. As discussed in Note 2 to the financial statements, Attune RTD for the years ended December 31, 2013 and 2012 has suffered a net loss of $1,360,596 and $953,445, respectively, and net cash used in operations of $242,493, and was a development stage company with little revenue. In addition, as of December 31, 2013 the company had a working capital deficit of $1,341,608 and an accumulated deficit of $6,240,455. These issues raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern.

/s/ M&K CPAS, PLLC
www.mkacpas.com
Houston, Texas
April 14, 2014

F-1

 

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of:

Attune RTD

We have audited the period from July 14, 2007, (Inception of Development Stage) to December 31, 2009 of Attune RTD (a development stage company) which includes revenues of zero and net loss of $1,510,191, and includes cash flows of $613,600 used in operating activities, $199,393 used in investing activities, and $919,487 provided by financing activities, which is included in accompanying statements of operations, changes in stockholders’ equity (deficit), and cash flows for the period from July 14, 2007, (Inception of Development Stage) to December 31, 2013. These financial statements are the responsibility of the Company's management. 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 financial statements referred to above present fairly, in all material respects, the results of Attune RTD's operations and its cash flows for the period from July 14, 2007 (Inception of Development Stage) to December 31, 2009, which is included in accompanying statements of operations, changes in stockholders’ equity (deficit), and cash flows for the period from July 14, 2007, (Inception of Development Stage) to December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has continuing net losses and cash flow deficits and is a development stage company with no revenues. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans as to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/S/ Salberg & Company, P.A.

SALBERG & COMPANY, P.A.

Boca Raton, Florida

March 29, 2010

2295 NW Corporate Blvd., Suite 240 • Boca Raton, FL 33431-7328

Phone: (561) 995-8270 • Toll Free: (866) CPA-8500 • Fax: (561) 995-1920

www.salbergco.com • info@salbergco.com

Member National Association of Certified Valuation Analysts • Registered with the PCAOB

Member CPAConnect with Affiliated Offices Worldwide • Member AICPA Center for Audit Quality

F-2

Attune RTD, Inc.

(A Development Stage Company)

Balance Sheets

	December 31, 2013			December 31, 2012
Assets
Current Assets
Cash	$	-		$	-
Total Current Assets		-			-
Property and Equipment, net		-			78,497
Total Assets	$	-		$	78,497
Liabilities and Stockholders’ Deficit
Current Liabilities
Accounts Payable and Accrued Expenses	$	254,915		$	145,372
Accrued Salaries		401,456			181,537
Royalty Payable		22,000			22,000
Deferred Revenue		-			10,000
Liability to Guarantee Equity Value		90,980			90,980
Convertible Note Payable (portion in default), net of discount of $16,898 and $2,696 at December 31, 2013 and 2012, respectively		155,502			120,304
Related Party Debt		29,620			10,184
Note Payable in default		217,350			171,107
Derivative Liability		169,785			110,828
Total Current Liabilities		1,341,608			862,312
Total Liabilities		1,341,608			862,312
Commitments and Contingencies (See Note 11)
Stockholders’ Deficit
Class B Participating Cumulative Preferred Super voting Stock, $0.0166 par value; 1,000,000 shares authorized; 1,000,000 issued and outstanding at December 31, 2013 and 2012, respectively		16,600			16,600
Class A Common Stock, $0.00004897 par value; 20,000,000,000 shares authorized; 43,312,429 and 32,126,727 shares issued and outstanding at December 31, 2013 and 2012, respectively		2,121			1,573
Additional Paid-in Capital		4,842,626			4,029,371
Stock Payable		37,500			48,500
Deficit accumulated during development stage		(6,240,455	)		(4,879,859	)
Total Stockholders’ Deficit		(1,341,608	)		(783,815	)
Total Liabilities and Stockholders’ Deficit	$	-		$	78,497

The accompanying notes are an integral part of these Financial Statements.

F-3

Attune RTD, Inc.

(A Development Stage Company)

Statements of Operations

							Period from July 14, 2007
	Year Ended			Year Ended			(Inception of Development Stage)
	December 31, 2013			December 31, 2012			to December 31, 2013
Revenues	$	950		$	1,877		$	50,577
Operating Expenses
General and Administrative Expense		847,966			546,273			4,146,251
Change in Fair Value-Derivative		21,240			(38,946	)		69,410
Impairment of Patent and Trademarks		-			-			62,634
Loss on Software Impairment		-			74,269			74,269
Payroll Expense		393,398			297,864			1,680,401
Total Operating Expenses		1,262,604			879,460			6,032,965
Loss from Operations		(1,261,654	)		(877,583	)		(5,982,388	)
Other Income (expense)
Gain on Asset Theft, net		-			-			29,125
Interest Expense		(98,942	)		(75,862	)		(180,939	)
Interest Income		-			-			15,999
(Loss) Gain on Debt conversion		-			-			(122,252	)
Total Other Income (expense)		(98,942	)		(75,862	)		(258,067	)
Net Loss		(1,360,596	)		(953,445	)		(6,240,455	)
Preferred stock dividends		(20,250	)		(20,250	)		(130,987	)
Net Loss applicable to common stock	$	(1,380,846	)	$	(973,695	)	$	(6,371,442	)
Net Loss per common share applicable to common stock:
Basic and diluted	$	(0.03	)	$	(0.03	)
Weighted average number of common shares outstanding:
Basic and diluted		39,951,230			30,583,453

The accompanying notes are an integral part of these Financial Statements.

F-4

Attune RTD, Inc.

(A Development Stage Company)

Statements of Changes in Stockholders’ Equity (Deficit)

From July 14, 2007 (Inception of Development Stage) to December 31, 2013

									Additional								Stockholders’
	Preferred Stock - Class B				Common Stock - Class A				Paid-in			Stock		Development			Equity
	Shares		Amount		Shares		Amount		Capital			Payable		Stage			(Deficit)
Balance July 14, 2007 (Inception of Development Stage)		-	$	-		-	$	-	$	-			-	$	-		$	-
Issuance of common stock for cash		133,333	$	2,213		224,000	$	11	$	78,776					-		$	81,000
Offering costs		-		-		-			$	(2,500	)				-		$	(2,500	)
Issuance of stock for services		866,667	$	14,387		14,050,000	$	688	$	285,755					-		$	300,830
Valuation of officer’s contributed services		-		-		-		-	$	111,781					-		$	111,781
Net loss, July 14, 2007 (Inception of Development Stage) to December 31, 2007		-		-		-		-		-				$	(441,633	)	$	(441,633	)
Balance at December 31, 2007		1,000,000	$	16,600		14,274,000	$	699	$	473,812		$	-	$	(441,633	)	$	49,478
Issuance of common stock for cash		-		-		2,352,803	$	115	$	360,135					-		$	360,250
Offering costs		-		-		-		-	$	(1,500	)				-		$	(1,500	)
Issuance of stock for services		-		-		169,000	$	8	$	34,522					-		$	34,530
Issuance of stock for debt settlement		-		-		100,000	$	5	$	14,995					-		$	15,000
Net loss, year ended December 31, 2008		-		-		-		-		-				$	(422,612	)	$	(422,612	)
Balance at December 31, 2008		1,000,000	$	16,600		16,895,803	$	827	$	881,964		$	-	$	(864,245	)	$	35,146
Issuance of common stock for cash		-		-		3,688,438	$	181	$	437,254			-		-		$	437,435
Offering costs		-		-		-		-	$	(7,000	)		-		-		$	(7,000	)
Issuance of stock for services		-		-		66,333	$	3	$	11,147			-		-		$	11,150
Issuance of stock for debt settlement		-		-		788,571	$	39	$	118,247			-		-		$	118,286
Net loss, year ended December 31, 2009		-		-		-		-		-			-	$	(645,946	)	$	(645,946	)

F-5

Balance at December 31, 2009	1,000,000	$	16,600	21,439,145		$	1,050		$	1,441,612		$	-	$	(1,510,191	)	$	(50,929	)
Issuance of common stock for cash	-		-	2,138,610		$	105		$	442,076			-		-		$	442,181
Issuance of stock for services	-		-	1,076,000		$	53		$	340,952			-		-		$	341,005
Issuance of stock for debt settlement	-		-	247,249		$	12		$	96,945			-		-		$	96,957
Redemption of Stock by Officers for Loan Repayment	-		-	(521,439	)	$	(26	)	$	(175,799	)		-		-		$	(175,825	)
Stock issued to Shareholder	-		-	139,944		$	7		$	(7	)		-		-		$	-
Net loss, year ended December 31, 2010	-		-	-			-			-			-	$	(1,036,938	)	$	(1,036,938	)
Balance at December 31, 2010	1,000,000	$	16,600	24,519,509		$	1,201		$	2,145,779		$	-	$	(2,547,129	)	$	(383,549	)
Issuance of common stock for cash	-		-	6,349,750		$	311		$	1,318,439			-		-		$	1,318,750
Issuance of common stock for services	-		-	965,000		$	47		$	250,003			-		-		$	250,050
Stock Redeemed	-		-	(29,988	)	$	(1	)	$	(4,998	)		-		-		$	(4,999	)
Stock rescinded from prior investment	-		-	(2,759,375	)	$	(135	)	$	135			-		-		$	-
Net loss, year ended December 31, 2011	-		-	-			-			-			-	$	(1,379,285	)	$	(1,379,285	)
Balance at December 31, 2011	1,000,000	$	16,600	29,044,896		$	1,422		$	3,709,359		$	-	$	(3,926,414	)	$	(199,033	)
Issuance of common stock for cash	-		-	1,530,000		$	75		$	152,925			-		-		$	153,000
Issuance of stock for services	-		-	1,413,900		$	69		$	152,321		$	48,500		-		$	200,890
Note payable Conversion	-		-	137,931		$	7		$	7,993			-		-		$	8,000
Change in Fair Value of Derivative due to conversion	-		-	-			-		$	6,773			—		-		$	6,773
Net loss, year ended December 31, 2012	-		-	-			-			-			-	$	(953,445	)	$	(953,445	)

F-6

Balance at December 31, 2012	1,000,000	$	16,600	32,126,727	$	1,573	$	4,029,371	$	48,500		$	(4,879,859	)	$	(783,815	)
Issuance of common stock for cash									$	12,500					$	12,500
Issuance of stock for services				6,732,500	$	330	$	672,920	$	(23,500	)				$	649,750
Note Payable Conversion				4,453,202	$	218	$	54,382							$	54,600
Settlement of Derivative due to Conversion							$	36,491							$	36,491
Disposal of truck – related party							$	4,815							$	4,815
Forgiveness of salary							$	40,000							$	40,000
Contributed Capital							$	4,647							$	4,647
Net loss, year ended December 31, 2013												$	(1,360,596	)	$	(1,360,596	)
Balance at December 31, 2013	1,000,000	$	16,600	43,312,429	$	2,121	$	4,842,626	$	37,500		$	(6,240,455	)	$	(1,341,608	)

The accompanying notes are an integral part of these Financial Statements.

F-7

Attune RTD, Inc.

(A Development Stage Company)

Statements of Cash Flows

	Year Ended						Period from July 14, 2007 (Inception of
	December 31,						Development Stage) to
	2013			2012			December 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(1,360,596	)	$	(953,445	)	$	(6,240,455	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Class A common stock and preferred stock granted for services		649,750			200,890			1,788,205
Contributed Capital		-			-			111,781
Depreciation and Amortization		89,704			97,703			243,307
Interest expense on conversion to Class A common stock		-			23,586			24,035
Loss on conversions of debt to Class A common stock		-			-			147,252
Gain on asset theft, net		-			-			(29,125	)
Impairment of Patent, Trademarks and Software		-			74,269			136,902
Change in Fair Value-Derivative		21,240			(38,946	)		69,410
Bad Debt Expense		-			-			9,000
Gain on forgiveness of debt		-			-			(25,000	)
Penalty Expense on defaulting – Asher Enterprises		1,500			43,000			5,800
Changes in Assets and Liabilities:
Accounts Receivable		-			9,783			(9,000	)
Prepaid Expenses		-			2,706			-
Security Deposit		-			1,800			(1,794	)
Accounts Payable and Accrued Expenses		355,909			72,270			672,026
Accrued Salary		-			-			117,874
Liability to Guarantee Equity Value		-			-			35,000
Deferred Financing Costs		-			124			829
Deferred Revenue		-			10,000			10,000
Royalty Payable		-			22,000			22,000
NET CASH USED IN OPERATING ACTIVITIES		(242,493	)		(434,260	)		(2,873,253	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Deferred Patent costs		-			-			(41,378	)
Trademark costs		-			-			(21,254	)
Loans receivable from Officers		-			-			(175,825	)
Insurance proceeds on asset theft		-			-			30,961
Cash paid for purchase of fixed assets		-			-			(27,820	)
Disposition of fixed assets		-			-			1,500
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		-			-			(233,816	)

F-8

CASH FLOWS FROM FINANCING ACTIVITIES: Contributed Capital		4,647		-			4,647
Sale of Class A - Common Stock		12,500		153,000			2,760,117
Offering costs related to the Sale of Class A - Common Stock		-		-			(11,000	)
Sale of Class B - Preferred Stock		-		-			45,000
Principal Payments on Capital Lease Obligations		-		(530)			(5,809	)
Loan Payable to Principal Stockholder		29,436		10,184			99,620
Repayment of Loan Payable to Principal Stockholder		-		-			(4,800	)
Borrowings on Debt		202,500		45,500			288,000
Principal payment on truck loans		(6,590)		(15,808)			(31,936	)
Principal payments on Software Licensing		-		(12,223)			(31,768	)
Cash Paid for Redemption of Stock		-		-			(5,000	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		242,493		180,123			3,107,069
NET INCREASE (DECREASE) IN CASH		-		(254,137)			-
CASH AT BEGINNING OF YEAR		-		254,137			-
CASH AT END OF YEAR	$	-	$	-		$	-
Supplemental Disclosure of Cash Flow Information
Cash paid during the year:
Interest Expense	$	98,942	$	75,862			176,871
Income Tax		-		-			-
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Conversion of a Vendor Liability into Shares of Class A Common Stock	$	-	$	-		$	40,000
Capital Lease Obligation Recorded as Property and Equipment	$	-	$	-		$	7,058
Conversion of a shareholder loan into shares of Class A common stock	$	-	$	-		$	55,200
Reclassification of equity to liability to guarantee equity value due to price guarantee upon conversion	$	-	$	-		$	70,000
Reclassification of accounts payable to liability to guarantee equity value due to price guarantee upon conversion		-		-		$	48,980
Capitalization of Deferred Financing Costs	$	-	$	-		$	2,500
Debt Discount	$	74,208	$	34,748		$	108,956
Conversion of Debt	$	54,600	$	8,000		$	62,600
Derivative Adjustment due to Debt Conversion	$	36,491	$	6,773		$	43,264
Redemption of stock by officers for loan repayment	$	-	$	-		$	175,828
Financing of Software costs	$	-	$	-		$	117,270
Financing of Truck Purchase	$	-	$	-		$	114,190
Shares accrued in the prior period and issued in current period	$	36,000	$	-		$	36,000
Disposal of Truck	$	65,949	$	-		$	65,949
Reclassification of Deferred revenue	$	10,000	$		-	$	10,000
Forgiveness of salary by related party	$	40,000	$	-		$	40,000

The accompanying notes are an integral part of these Financial Statements.

F-9

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Attune RTD, Inc. (the “Company”) was incorporated in Nevada on December 2001 as Catalyst Set Corporation and was dormant until July 14, 2007. On September 7, 2007, the Company changed its name to Interfacing Technologies, Inc. On March 24, 2008, the Company changed its name to Attune RTD, Inc., which it believes more accurately reflects its current business operations.

The Company was formed in order to provide developed technology related to the operations of energy efficient electronic systems such as swimming pool pumps, sprinkler controllers and heating and air conditioning controllers, among others.

The Company is presented as in the development stage from July 14, 2007 (Inception of Development Stage) through December 31, 2013. To date, the Company’s business activities during development stage have been corporate formation, raising capital and the development and patenting of its products with the hopes of entering the commercial marketplace in the near future.

We are a development stage company. We have generated no significant revenues to date. Our auditors have raised substantial doubt as to our ability to continue as a going concern.

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 as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include the estimates of depreciable lives and valuation of property and equipment, allowances for losses on loans receivable, valuation of deferred patent costs, valuation of equity based instruments issued for other than cash, valuation of officers’ contributed services, and the valuation allowance on deferred tax assets.

The Company recognizes expenses in the same period in which they are incurred. The Company recognizes revenue in the same period in which they are incurred from its business activities when goods are transferred or services rendered. The Company’s revenue generating process consists of the sale of its proprietary technology or the rendering of professional services consisting of consultation and engineering relating types of activity within the industry. The Company’s current billing process consists of generating invoices for the sale of its merchandise or the rendering of professional services. Typically, invoices are accepted by vendor and payment is made against the invoice within 60 days upon receipt.

CASH AND CASH EQUIVALENTS

For the purposes of the statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at December 31, 2013 or 2012, respectively.

PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service. The Company generally uses the following depreciable lives for its major classifications of property and equipment:

F-10

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

Depreciation	Useful Lives
Vehicles	5 Years
Computers	5 Years
Equipment	5 Years

CONCENTRATION OF CREDIT RISK

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash. The Company’s cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. The risk is managed by maintaining all deposits in high quality financial institutions. The Company had $0 of cash balances in excess of federally insured limits at December 31, 2013 and 2012.

REVENUE RECOGNITION

The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, the fees are fixed or determinable, no significant Company obligations remain, and collection of the related receivable is reasonably assured.

The Company recognizes revenue in the same period in which they are incurred from its business activities when goods are transferred or services rendered. The Company’s revenue generating process consists of the sale of its proprietary technology or the rendering of professional services consisting of consultation and engineering relating types of activity within the industry. The Company’s current billing process consists of generating invoices for the sale of its merchandise or the rendering of professional services. Typically, invoices are accepted by vendor and payment is made against the invoice within 60 days upon receipt.

Revenues for the year ended December 31, 2013 were concentrated solely from one customer. The Company anticipates that its revenues in the future will come from both retail consumers and resellers.

DEFERRED PATENT COSTS AND TRADEMARK

Patent costs are stated at cost (inclusive of perfection costs) and will be reclassified to intangible assets and amortized on a straight-line basis over the estimated future periods to be benefited (typically, twenty years) if and once the patent has been granted by the United States Patent and Trademark office (“USPTO”). The Company will write-off any currently capitalized costs for patents not granted by the USPTO. Currently, the Company has one patent, U.S. Patent No. 7,777,366 B2, which was awarded by the USPTO on August 17, 2010.

On December 16, 2008, the Company filed its service mark, BrioWave, in standard characters with the USPTO. The service mark was first used in commerce on August 8, 2008 and filed for opposition by the USPTO on January 5, 2010. Trademark costs are capitalized on the Company’s balance sheet during the period such costs are incurred. The trademark is determined to have an indefinite useful life and is not amortized until such useful life is determined no longer indefinite. The trademark is reviewed for impairment annually. As of December 31, 2013, the Company fully impaired all patents and trademarks cost of $62,634 due to uncertainty regarding funding of future costs.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company accounts for long-lived assets in accordance with “Accounting for the Impairment or Disposal of Long-Lived Assets” (ASC 360-10). This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

F-11

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

In December 2011, the Company assessed its patents and trademarks and based on uncertainty of future funding and commercialization, the Company recognized a loss on all of its trademark and patents in the amount of $62,634, the carrying value at the time of impairment.

In December 2012, the Company assessed its software and based on uncertainty of future funding and commercialization, the Company recognized a loss on its software in the amount of $74,269, the carrying value at the time of impairment. 

SOFTWARE LICENSE

The Company capitalized its purchase of a software license in March 2013. The license is being amortized over 60 months following the straight-line method and is included in “Other Assets” on the Company’s balance sheet in accordance to ASC 350. During the year ended December 31, 2013, the Company recorded $19,545 of amortization expense related to the license. The terms and conditions of the license arrangement that it has in place with its vendor, IBI, for the software is based on a sixty month buyout agreement for a perpetual license, which is payable in equal consecutive monthly installments of $5,650. The monthly payment includes interest, the respective portion of a one-time software license fee of $142,669 and associated maintenance fees. This agreement grants the Company the non-exclusive, non-transferable right to use the specified software in object code form only, on the Company’s designated servers. The fees and the installment payments may not be cancelled. If installments are not made when due, and the default continues for 30 days after notice, the remaining unpaid balance of the one-time license fee shall be immediately due and payable. The Company may prepay the balance of remaining installments at any time, with an appropriate credit, as determined by IBI, for the future portion of the interest. Maintenance will be provided for the balance of the designated period. The vendor may transfer and assign the Company’s payment obligation hereunder. As of December 31, 2013, the Company is in default under the terms and conditions of the license agreement. The Company has been in contact with IBI over the non-payment situation and as of the date of this filing, the vendor has not prevented access to the software and continues to bill the Company for its respective monthly payments. Due to insignificant revenue and possible termination of contract, the Company has recognized impairment of $74,269 related to the software license as of December 31, 2012. The asset is fully impaired.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Note), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale.

F-12

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

RESEARCH AND DEVELOPMENT

In accordance generally accepted accounting principles (ASC 730-10), expenditures for research and development of the Company’s products are expensed when incurred, and are included in operating expenses.

ADVERTISING

The Company conducts advertising for the promotion of its products and services. In accordance with generally accepted accounting principles (ASC 720-35), advertising costs are charged to operations when incurred, and such amounts aggregated $750 and $36,700 for the years ended December 31, 2013 and 2012, respectively.

STOCK-BASED COMPENSATION

Compensation expense associated with the granting of stock based awards to employees and directors and non-employees is recognized in accordance with generally accepted accounting principles (ASC 718-20) which requires companies to estimate and recognize the fair value of stock-based awards to employees and directors. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.

INCOME TAXES

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

In July 2006, the FASB issued ASC 740, “Accounting for Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a return. ASC 740 provides guidance on the measurement, recognition, classification and disclosure of tax positions, along with accounting for the related interest and penalties. ASC 740 became effective as of January 1, 2007 and had no impact on the Company’s financial statements.

The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

FAIR VALUE OF FINANCIAL INSTRUMENTS

On January 1, 2008, the Company adopted ASC No. 820-10 (ASC 820-10), Fair Value Measurements. ASC 820-10 relates to financial assets and financial liabilities.

ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions.

ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions, about market participant assumptions that are developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820-10 are described below:

F-13

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

● Level 1. Observable inputs such as quoted prices in active markets;

● Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

● Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2013, on a recurring basis:

Description	Level 1		Level 2		Level 3		Gains (Losses)
Derivative Liability	$	-	$	-	$	169,785	$	(21,240	)
Total	$	-	$	-	$	169,785	$	(21,240	)

The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2012, on a recurring basis:

Description	Level 1		Level 2		Level 3		Gains (Losses)
Derivative Liability	$	-	$	-	$	110,828	$	38,946
Total	$	-	$	-	$	110,828	$	38,946

BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of common stock equivalents such as stock options and convertible debt instruments. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As of December 31, 2013 and 2012, there were no potentially dilutive securities. As a result, the basic and diluted per share amounts for all periods presented are identical

NEW ACCOUNTING PRONOUNCEMENTS

In February 2013, Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

- Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income (but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period); and

- Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

F-14

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the FASB determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill . The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

2. GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. For the years ended December 31, 2013 and 2012, the Company had a net loss of $1,360,596 and $953,445, respectively, and net cash used in operations of $242,493 and $434,260, respectively, and was a development stage company with little to no revenues. In addition, as of December 31, 2013, the Company had a working capital deficit of $1,341,608 and a deficit accumulated during the development stage of $6,240,455.

F-15

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties.

In order to execute its business plan, the Company will need to raise additional working capital and generate revenues. There can be no assurance that the Company will be able to obtain the necessary working capital or generate revenues to execute its business plan.

Management’s plan to increase working capital includes completing product development, generating marketing agreements with product distributors and raising additional funds through a private placement offering or offerings of the Company’s common stock.

Management believes its business development and capital raising activities will provide the Company with the ability to continue as a going concern. 

3. PATENTS AND TRADEMARKS

In December 2011, the Company assessed its patents and trademarks and due to uncertainty of future funding and commercialization, the Company recognized a loss on its trademark and patents in the amount of $62,634, the carrying value at the time of impairment.

In December 2012, the Company assessed its software and due to uncertainty of future funding and commercialization, the Company recognized a loss on its software in the amount of $74,269, the carrying value at the time of impairment.

4. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	Est. Useful Lives		December 31, 2013	December 31, 2012
Computer equipment	5 Years	$	-		10,227
Office equipment	5 Years		-		5,606
Vehicles	5 Years		-		114,190
			-		130,023
Less total accumulated depreciation			-		(51,526	)
		$	-		78,497

Total depreciation expense for the years ended December 31, 2013 and 2012 was $12,547 and $28,715, respectively.

5. NOTE PAYABLE

Secured Promissory Note 1. On June 21, 2013, The Company issued a Secured Promissory note in the amount $55,000 to an investor (the “Secured Promissory Note 1”). Secured Promissory Note 1 has a maturity date of June 23, 2014 and an annual interest rate of 12% per annum. Secured Promissory Note 1 is collateralized with the Company’s Energy Forecasting and Management Device”, Patent #7777366, including the associated source code. Under the terms and conditions of the agreement, a portion of the funds received from investor was used to satisfy a debt obligation owed to the Company’s patent filing attorney. As an incentive to induce investor, the Company issued a Warrant grant, giving the investor the right, but not the obligation, to purchase 1,375,000 shares of common stock at a fixed price of $0.04 per share, issued on June 21, 2013 and expiring at midnight on June 23, 2016. The warrants issued are tainted due to the derivative liability, see note 7.

F-16

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

Secured Promissory Note 2. On June 21, 2013, The Company issued a Secured Promissory note in the amount $55,000 to an investor (the “Secured Promissory Note 2”). Secured Promissory Note 2 has a maturity date of June 23, 2014 and an annual interest rate of 12% per annum. Secured Promissory Note 2 is collateralized with the Company’s Energy Forecasting and Management Device”, Patent #7777366, including the associated source code. Under the terms and conditions of the agreement, a portion of the funds received from investor was used to satisfy a debt obligation owed to the Company’s patent filing attorney. As an incentive to induce investor, the Company issued a Warrant grant, giving the investor the right, but not the obligation, to purchase 1, 375,000 shares of  common stock at a fixed price of $0.04 per share, issued on June 21, 2013 and expiring at midnight on June 23, 2016. The warrants issued are tainted due to the derivative liability, see note 7.

During the period, the Company received $29,436 advances from a related party. The advances are non-interest bearing with no stated maturity. In the event of a default, all payments made by the related party will be converted into the Company’s common stock at a conversion price of $0.13 per share. As of December 31, 2013, the Company is not in default.

On June 8, 2013, the Company released and discharged two Ford F150 vehicles, and all claims of ownership along with the entire remaining debt obligations owed on each vehicle to each of Messrs. Davis and Bianco. Both vehicles were purchased personally by and registered to each of Messrs. Davis and Bianco for business use in a pilot program the Company participated in with a major utility provider. The Company began making payments of $755.70 beginning on June 6, 2011 for the vehicle purchased by Mr. Davis and ended making payments on December 2012. The Company began making payments of $755.70 beginning on June 6, 2011 for the vehicle purchased by Mr. Bianco and ended making payments on December 2012. During the period ended, December 31, 2013, the Company wrote of $70,764 of debt related to balance owed on the two trucks. In association with the truck, the net book value of $65,949 was simultaneously written off. The difference of $4,815 was recorded as additional paid-in capital due to related party relationship.

6. CONVERTIBLE NOTE

Convertible Note 1. On September 2011, the Company issued a convertible promissory note in the amount of $42,500 to an investor (the “Convertible Note 1”). Convertible Note 1 had a maturity date of July 2012 and an annual interest rate of 8% per annum. The holder of Convertible Note 1 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. The convertible note has a variable conversion price of 58% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded convertible note as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $34,430, as of December 31, 2012, the discount was fully amortized. On May 2012, the Company issued 137,931 shares of Class A Common Stock to holder of the convertible note for conversion of $8,000 principal. During the period ended December 31, 2012, the Company was assessed a penalty of $17,250 due to default. On March 2013, the Company issued 591,133 shares of Class A Common Stock to the holder for the conversion of $12,000 principal of the convertible note. On July 2013, the Company issued 862,069 shares of the Class A Common Stock to the holder of the convertible note for the conversion of $15,000 principal of the convertible note. On October 2013, the Company issued 2,000,000 shares of Class A Common Stock to the holder of convertible note for the conversion of $7,600 principal of the convertible note. Due to conversion in accordance with the conversion terms; therefore, no gain of loss was recognized. As of December 31, 2013, the Company has a remaining principal balance due of $17,150 and accrued interest of $2,823.

Convertible Note 2. On January 5, 2012, the Company issued a second convertible promissory note in the amount of $42,500 to the same investor (the “Convertible Note 2”). Convertible Note 2 had a maturity date of July 2012 and an annual interest rate of 8% per annum. The holder of Convertible Note 2 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 2 has a conversion price of 58% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded Convertible Note 2 as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $31,748, as of December 31, 2012, the discount was fully amortized. As of December 31, 2012, the Company is in default and was assessed a penalty of $21,250. As of December 31, 2013, the Company has a remaining principal balance due of $63,750 and accrued interest of $5,280.

F-17

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

Convertible Note 3. On December 3, 2012, the Company issued a third convertible promissory note in the amount of $3,000 to the same investor (the “Convertible Note 3”). Convertible Note 3 had a maturity date of September 5, 2013 and an annual interest rate of 8% per annum. The holder of Convertible Note 3 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 3 has a conversion price of 58% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. The holder of Convertible Note 3 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 3 has a conversion price of 58% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded Convertible Note 3 as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $3,000, as of December 31, 2013, the discount was fully amortized. As of December 31, 2013, the Company is in default with the repayment term and was assessed a penalty of $1,500. As of December 31, 2013, the Company has a remaining principal balance due of $4,500 and accrued interest of $266.

Convertible Note 4. On February 21, 2013, the Company issued a fourth convertible promissory note in the amount of $50,000 to the same investor (the “Convertible Note 4”). Convertible Note 4 had a maturity date of November 25, 2013 and an annual interest rate of 8% per annum. The holder of Convertible Note 4 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 4 has a conversion price of 50% representing a discount rate of 50% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded Convertible Note 4 as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $38,864, as of December 31, 2013, the discount was fully amortized. As of December 31, 2013, the Company has a remaining principal balance due of $50,000 and accrued interest of $3,430.

Convertible Note 5. On April 18, 2013, the Company issued a fifth convertible promissory note in the amount of $22,500 to the same investor (the “Convertible Note 5”). Convertible Note 5 had a maturity date of January 22, 2014 and an annual interest rate of 8% per annum. The holder of Convertible Note 5 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 5 has a variable conversion price of 45% representing a discount rate of 55% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded Convertible Note 5 as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $21,824, as of December 31, 2013, the discount of 12,546 was amortized. As of December 31, 2013, the Company has a remaining principal balance due of $22,500 and accrued interest of $1,267.

Convertible Note 6. On August 5, 2013, the Company issued a sixth convertible promissory note in the amount of $10,000 to the same investor (the “Convertible Note 6”). Convertible Note 6 has a maturity date of May 7, 2014 and an annual interest rate of 8% per annum. The holder of Convertible Note 6 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 6 has a variable conversion price of 35% representing a discount rate of 65% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded Convertible Note 6 as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $10,000, as of December 31, 2013, the discount of $2,444 was amortized. As of December 31, 2013, the Company has a remaining principal balance due of $10,000 and accrued interest of $324

Convertible Note – related party. During the fiscal year 2013, the Company amended a $10,000 promissory note to a convertible promissory note with a related party. The note was amended to include a fixed conversion price of $0.02 per share. During the same period, the Company entered into another $10,000 Convertible Note with the same holder under the same term. Due to the embedded derivative as a result of the Convertible Notes 1 through 6, taints all convertible instrument and as such the notes are value apart of derivative liability (See note 8). As a result of the derivative the Company recorded a debt discount of $3,546, as of December 31, 2013, the discount was fully amortized. During the same period, both convertible notes were converted into 1,000,000 shares of Class A Common Stock. Due to conversion within the terms of the note, no gain or loss was recorded.

F-18

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

Default under Certain Notes. Because the Company has failed to pay the remaining principal balance, together with accrued and unpaid interest, upon the maturity dates of Convertible Notes 1, 2, and 3 (collectively, the “Convertible Notes”), the Company is now in default under the respective Convertible Notes. The Convertible Notes are held by the same holder. On January 30, 2013, the holder of Convertible Notes presented a demand for immediate payment, as provided in the terms of the notes, of an aggregate of $120,000, representing 150% of the remaining outstanding principal balance of Convertible Notes 1, 2, and 3, together with default interest under the terms of the Notes. As of the date of this filing, the Company continues to work with the holder of the Convertible Notes. The Company anticipates the parties will be able to resolve the issue amicably. The holder of the Convertible Notes has continued to support the Company and has advanced certain additional funds to the Company after the date of his initial demand letter. The excess of $1,500 owed in addition to the principal amount owed under Convertible Notes represents penalty on default and is recorded as a loss in the Company’s income statement. As of December 31, 2013 and 2012, total principal under default is $89,900 and $120,000, respectively.

Tainted Investor Warrants. The derivative feature of the Convertible Notes taints all existing convertible instruments, and specifically taints the 2,750,000 warrants issued on June 21, 2013 that will mature on June 23, 2016. As of December 31, 2013, the Company recognized a loss of tainting of warrants of $30,116 (see Note 7).

7. DERIVATIVE LIABILITY

As discussed in Note 6 under Convertible Debentures, the Company issued convertible notes payable that provide for the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment is tainted and all additional convertible debentures and warrants are included in the value of the derivative. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded as derivative liabilities on the issuance date.

The fair values of the Company’s derivative liabilities were estimated at the issuance date and are revalued at each subsequent reporting date, using a lattice model. The Company recorded current derivative liabilities of $169,785 and $110,828 at December 31, 2013 and 2012, respectively. The change in fair value of the derivative liabilities resulted in a loss of ($21,240) and gain $38,946 for the period ended December 31, 2013 and 2012, respectively, which has been reported as other income (expense) in the statements of operations. The loss of $21,240 for the period ended December 31, 2013 consisted of a gain of $13,056 attributable to the fair value of attributable to the fair value of the convertible notes; an expense of ($30,116) attributable to the issuance of warrants that were tainted during the period; and a loss of ($4,180) attributable to value excess of the convertible note discount. The gain of $38,946 for the period ended December 31, 2012 consisted of a gain of $38,946 attributable to the fair value of attributable to the fair value of the convertible notes.

The following presents the derivative liability value at December 30, 2013 and 2012:

	December 31, 2013		December 31, 2012
Convertible Note - Related party	$	169,785	$	110,828
	$	169,785	$	110,828

F-19

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

The following is a summary of changes in the fair market value of the derivative liability during the period ended December 31, 2013 and 2012:

Balance, December 31, 2011	$	121,546
Increase in derivative due to issuance of convertible note		35,002
Change in fair market value of derivative liabilities due to the mark to market adjustment		(38,946	)
Decrease due to debt conversion		(6,774	)
Balance, December 31, 2012		110,828
Increase in derivative value due to issuance of convertible notes		78,388
Increase in derivative value due to tainting of warrants		30,116
Change in fair market value of derivative liabilities due to the mark to market adjustment		(13,056	)
Decrease due to debt conversion		(36,491	)
Balance, December 31, 2013	$	169,785

Key inputs and assumptions used to value the convertible debentures and warrants issued during the period ended December 31, 2013 and 2012:

- The Note #1 & #2 face amount as of 12/31/13 is $93,000 with an initial conversion price of 58% of the 3 lowest lows out of the 10 previous days (effective rate of 40.27%). Both notes are in default and obligated to pay the 50% penalty and accrued interest – we therefore assumed the note balances of $19,166 and $66,234 (total $93,000) and no additional interest is being accrued.

- The Note #3 face amount as of 12/31/13 is $3,000 (plus a default penalty assessment of $1,500) with an initial conversion price of 50% of the 3 lowest lows out of the 10 previous days (effective rate of 34.71%).

- The Note #4 face amount as of 12/31/13 is $50,000 with an initial conversion price of 50% of the lowest lows out of the 90 previous days (effective rate of 34.71%).

- The Note #5 face amount as of 12/31/13 is $22,500 with an initial conversion price of 45% of the lowest lows out of the 90 previous days (effective rate of 31.24%

- The Note #6 face amount as of 12/31/13 is $0 (converted 7/25/13).

- The Note #7 face amount as of 12/31/13 is $10,000 with an initial conversion price of 35% of the lowest lows out of the 120 previous days (effective rate of 24.30%).

- The projected volatility curve for each valuation period was based on the annual historical volatility of the company.

- For Notes #1 through #7 an event of default would occur 10% of the time, increasing 5.00% per quarter to a maximum of 50%.

- The Holder would redeem based on availability of alternative financing, increasing 2.0% monthly to a maximum of 10%; and

- The Holder would automatically convert the notes at maturity if the registration was effective and the company was not in default.

8. COMMON STOCK

Upon formation, the Company was authorized to issue 50,000 shares of common stock with no par value. On September 7, 2007, upon shareholder approval, the Company amended its Articles of Incorporation to increase the number of authorized common shares to 1,000,000. On that same date, the Company also effected a 280 for 1 forward stock split. All share and per share data in the accompanying financial statements has been retroactively adjusted to reflect the stock split.

F-20

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

On November 28, 2007, upon shareholder approval, the Company amended its Articles of Incorporation to establish two classes of stock. The first class of stock is Class A Common Stock, par value $0.0166, of which 59,000,000 shares were initially authorized, and the holders of the Class A Common Stock are entitled to one vote per share. The second class of stock is Class B Participating Cumulative Preferred Super-voting Stock, par value $0.0166, of which 1,000,000 shares are authorized. On March 4, 2013, stockholders voted to approve an amendment to the Company’s Amended and Restated Articles of Incorporation to (a) increase the number of authorized shares of Common Stock from fifty nine million (59,000,000) shares of Common Stock to twenty billion (20,000,000,000) shares of Common stock; (b) amend the par value of Common Stock from a par value $0.0166 per share to a par value of $0.00004897 per share; (c) amend the Class B Participating Cumulative Preferred Super-voting Stock such that the voting rights of Class B shareholders are increased from one hundred votes per share to twenty thousand votes per share; and (d) authorize the issuance of five million (5,000,000) shares of “blank check” preferred stock, $0.0166 par value per share, to be issued in series, and all properties of such preferred stock to be determined by the Company’s Board of Directors. The amendment became effective on July 10, 2013. All share and per share data in the accompanying financial statements has been retroactively adjusted to reflect the stock split.

The holders of the Class B Participating Cumulative Preferred Super-voting Stock are permitted to vote their shares cumulatively as one class with the Class A Common Stock. The Class B Participating Cumulative Preferred Super-voting Stock pays dividends at 6%. For the years ended December 31, 2013, 2012, 2011, 2010, 2009, 2008, and 2007, the Company’s Board of Directors did not declare any dividends. Total undeclared Class B Participating Cumulative Preferred Super-voting Stock dividends as of December 31, 2013, 2012, 2011, 2010, 2009, 2008, and 2007 were$130,987, $110,737, $90,487, $70,237, $49,987, $29,737, and $9,487, respectively.

Class A Common Stock

Issuances of the Company’s common stock during the years ended December 31, 2007, 2008, 2009, 2010, 2011, 2012 and 2013 included the following:

Shares Issued for Cash

During 2007, 224,000 shares of Class A common stock were issued for $36,000 cash with various prices per share ranging from $0.15 to $0.25. Additionally, the Company paid cash offering costs of $2,500.

During 2008, 2,352,803 shares of Class A common stock were issued for $360,250 cash with various prices per share ranging from $0.13 to $0.25. Additionally, the Company paid cash offering costs of $1,500.

In 2009, 3,688,438 shares of Class A common stock were issued for $437,435 cash with various prices per share ranging from $0.04 to $0.35. Additionally, the Company paid cash offering costs of $7,000.

In 2010, 2,138,610 shares of Class A common stock were issued for $442,181 cash with various prices per share ranging from $0.18 to $0.35.

In 2011, 6,349,750 shares of Class A common stock were issued for $1,318,750 cash with various prices per share ranging from $0.20 to $0.35.

In 2012, 1,530,000 shares of Class A common stock were issued for $153,000 cash with $0.10 price per share.

In 2013, 357,143 shares of Class A common stock were issued for $12,500 cash with $0.035 price per share. The shares were unissued as of December 31, 2013 and recorded as a stock payable.

Shares Issued for Services

In 2007, 14,000,000 vested shares of Class A common stock were issued to the Company’s founders, having a fair value of $232,400, based on a nominal value of $0.0166 per share. The $232,400 was expensed upon issuance as the shares were fully vested.

In 2007, 50,000 shares of Class A common stock were issued for legal services provided to the Company with a value of $7,500 or $0.15 per share, based on contemporaneous cash sales prices.

F-21

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

In 2008, 169,000 shares of Class A common stock were issued for services with a fair value of $34,530 ranging from $0.13 to $0.25 per share, based on contemporaneous cash sales prices.

In March 2009, 8,000 shares of Class A common stock were issued for services provided to the Company with a value of $2,400 or $0.30 per share, based on contemporaneous cash sales prices.

In June 2009, 17,333 shares of Class A common stock were issued for services provided to the Company with a value of $2,600 or $0.15 per share, based on contemporaneous cash sales prices.

In August 2009, 41,000 shares of Class A common stock were issued for services provided to the Company with a value of $6,150 or $0.15 per share, based on contemporaneous cash sales prices.

In February 2009, 500,000 shares of contingently returnable Class A common stock were issued to a consultant pursuant to an agreement whereby the consultant was required to establish a contract with a specific distributor and produce a sale of the Company’s product through such distribution channel. As of the date of this filing, no sales have occurred under the contract and the shares are not considered issued or outstanding for accounting purposes.

In January 2010, 21,000 shares of Class A common stock were issued for services provided to the Company with a value of $5,250 or $0.25 per share, based on market price on the date of grant.

In June 2010, 750,000 shares of Class A common stock were issued for services provided to the Company with a value of $270,200 at values ranging from $0.20 to $0.50 per share, based on market price on the date of grant.

In July 2010, 250,000 shares of Class A common stock were issued for services provided to the Company with a value of 37,500 or $0.15 per share, based on market price on the date of grant.

In December 2010, 55,000 shares of Class A common stock were issued to two vendors for services with a value of $28,050, based on based on market price on the date of grant.

In June 2011, 815,000 shares of Class A common stock were issued for services provided to the Company with a value of $220,050 at $0.27 per share, based on market price on the date of grant.

In August 2011, 50,000 shares of Class A common stock were issued for services provided to the Company with a value of $10,000 at $0.20 per share, based on market price on the date of grant.

In November 2011, 100,000 Shares of Class A common stock were issued for services provided to the Company with a value of $20,000 at $0.20 per share, based on market price on the date of grant.

In March 2012, 125,000 shares of Class A common stock were issued for services provided to the Company with a value of $12,500 at $0.10 per share, based on market price on the date of grant.

In June 2012, 125,000 shares of Class A common stock were issued for services provided to the Company with a value of $12,500 at $0.10 per share, based on market price on the date of grant.

In July 2012, 888,900 shares of Class A common stock were issued for services provided to the Company with a value of $88,890 at $0.10 per share, based on market price on the date of grant.

In September 2012, 275,000 shares of Class A common stock were issued for services provided to the Company with a value of $33,500 at $0.10 per share, based on market price on the date of grant

In October 2012, 360,000 shares of Class A common stock were authorized for services provided to the Company with a value of $36,000 at $0.10 per share, based on market price on the date of grant. As of December 31, 2013, the shares have not been issued and are recorded as stock payable.

F-22

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

In December 2012, 125,000 shares of Class A common stock were authorized for services provided to the Company with a value of $12,500 at $0.10 per share, based on market price on the date of grant. As of December 31, 2013, the shares have not been issued and are recorded as stock payable.

In January 2013, 6,000,000 shares of Class A common stock were issued to related parties for services provided to the Company with a value of $600,000 at $0.10 per share based on market price on the date of grant.

In February 2013, 72,500 shares of Class A common stock were issued for services provided to the Company with a value of $7,250 at $0.10 per share, based on market price on the date of grant.

In February 2013, 300,000 shares of Class A common stock were issued for services provided to the Company with a value of $30,000 at $0.10 per share, based on market price on the date of grant.

In March 2013, 360,000 shares of Class A common stock were issued for services provided to the Company with a value of $18,000 at $0.05 per share, based on market price on the date of grant.

Shares Issued in Conversion of Other Liabilities

During 2008, 100,000 shares of Class A common stock were issued upon conversion of a $35,000 liability to a vendor. The shares were valued at $0.15 per share or $15,000, based on a contemporaneous cash sales price and the Company recorded a $20,000 gain on conversion of debt.

In July 2009, 139,944 shares of Class A common stock were issued upon conversion of a $48,980 liability from a vendor. The shares were valued at $16,793 or $0.12 per share, based on a contemporaneous cash sales price. The Company agreed with the vendor, prior to conversion, that it would guarantee the value of the stock, when sold by the vendor, up to the dollar value for the 2009 liability converted (a total of $48,980) and the above mentioned 2008 conversion as it was the same vendor ($35,000) and any difference in value, if less than the liability, would be paid in cash by the Company. As a result, the Company recorded the $48,980 conversion as a liability along with the prior year conversion of $35,000 which resulted in an additional loss on conversion in 2009 of $35,000. The total cumulative liability to guarantee equity value from fiscal 2009 totaled $83,980 as relating to the above shares at December 31, 2009. These shares were actually issued in 2010; however the liability was recorded in 2009 based on this guarantee.

In August 2009, the Company converted $55,200 of loans due to a shareholder into 788,571 shares of common stock, which were valued at $118,286 or $0.15 per share, based on contemporaneous cash sales prices of the Company’s common stock. The Company recognized a loss on conversion of $62,637 and charged $449 to interest expense.

During 2010, 247,249 shares of Class A common stock were issued upon conversion of $39,272 of vendor liabilities. The shares were valued from $0.10 to $0.36 per share, based on a contemporaneous cash sales price and the Company recorded a $49,615 loss on conversion of debt

In 2010, the Company issued 900,000 warrants to several investors in the Company. These warrants are attached to issuances of common stock. 

On October 2011, the Company issued a convertible note which as a result taints all convertible instruments outstanding. As such the Company recorded a derivative liability of $40,498 for warrants outstanding (see Note 8).

On May 16, 2012, the Company issued 137,931 shares of Class A Common Stock to convert $8,000 of the convertible note into equity. The note was converted in accordance with the conversion terms; therefore, no gain of loss was recognized.

In March 2013, the Company issued 591,133 shares of Class A common stock as partial conversion of $12,000 of the principal of the noted dated September 28, 2011 as amended on October 17, 2011. Due to conversion within the terms of the note, no gain or loss was recognized.

F-23

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

In July 2013, the Company issued 862,069 shares of common stock to convert $15,000 of the convertible note dated October 2011 into equity (see Note 6). Due to conversion within the terms of the note, no gain or loss was recognized.

In July 2013, the Company issued 1,000,000 shares of Class A common stock to a related party to convert $20,000 of the convertible note dated June 2013 into equity (see Note 6). Due to conversion within the terms of the note, no gain or loss was recognized.

In July 2013, the Company issued 2,000,000 shares of Class A common stock to convert $7,600 of the convertible note dated in September 2011 into equity (see Note 6). Due to conversion within the terms of the note, no gain or loss was recognized.

2010 Equity Incentive Plan

In June 2010, the Company registered 4,000,000 shares of Class A Common Stock pursuant to its 2010 Equity Incentive Plan which was also enacted in June 2010. The Company’s Board of Directors have authorized the issuance of the Class A shares of common stock to employees upon effectiveness of an effective registration statement. The 2010 Equity Incentive Plan is intended to compensate employees for services rendered. The employees who will participate in the 2010 Equity Incentive Plan have agreed or will agree in the future to provide their expertise and advice to us for the purposes and consideration set forth in their written agreements pursuant to the 2010 Equity Incentive Plan. The services to be provided by the employees will not be rendered in connection with: (i) capital-raising transactions; (ii) direct or indirect promotion of Class A common stock; (iii) maintaining or stabilizing a market for the Class A common stock. The Board of Directors may at any time alter, suspend or terminate the 2010 Equity Incentive Plan.

As of December 31, 2013, 800,000 shares were approved under this plan for issuance by the Company’s Board of Directors, however, none of these shares have been granted or issued to date.

Class B Participating Cumulative Preferred Super-voting Stock

Issuances of the Company’s Preferred Stock during the years ended December 31, 2007, 2008 and 2009 included the following:

Shares Issued for Cash

In 2007, 133,333 shares of Class B Preferred Stock were issued for $45,000 cash or $0.3375 per share.

Shares Issued for Services

In 2007, 866,667 shares of Class B Preferred Stock were issued to the Company’s founders for services rendered during 2007 with a value of $0.3375 per share based on the above contemporaneous sale of Class B Preferred Stock.

9. GUARANTEE OF EQUITY VALUE

In March 2010, 120,000 shares of common stock were issued upon conversion of a $24,000 liability from a vendor. The shares were valued at $42,000 or $0.35 per share, based on a contemporaneous cash sales price and the Company recognized a loss on conversion of $18,000. The Company agreed with the vendor, prior to conversion, that it would guarantee the value of the stock, when sold by the vendor, up to the dollar value for the 2009 liability converted in 2010 of $24,000, plus an additional $11,000 for a total sales price of $35,000 when sold by the vendor. Any difference in value, if less than the liability, will be paid by the Company in cash or through the issuance of additional common stock. As a result, the Company recorded the $24,000 conversion as a liability along with the additional $11,000 guarantee for a total guarantee liability of $35,000. During 2011, the vendor forgave $25,000 of the payable where the Company recorded as gain on forgiveness of debt. A cash payment of $3,000 was also made in relation to the total payable outstanding.

The total cumulative liability to guarantee equity value totaled $90,980 as of December 31, 2013 and 2012. No shares have been sold by the vendor through December 31, 2013. 

F-24

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

10. INCOME TAXES

The Company accounts for income taxes under FASB ASC 740-10, which provides for an asset and liability approach of accounting for income taxes. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences, using currently enacted tax laws, attributed to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts calculated for income tax purposes.

For the years ended December 31, 2013 and 2012, respectively, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. The Company had approximately $598,399 and $637,429 of federal net operating losses at December 31, 2013 and 2012, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2030. 

	Year ended December 31,
	2013			2012
Deferred tax asset
NOL Carry forward	$	(598,399	)		(637,429	)
Net Deferred Tax assets before valuation allowance		954,812			745,373
Less: Valuation allowance		(954,812	)		(745,373	)
Net deferred tax assets	$	-		$	-

Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2013 and 2012, respectively.

A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:

	Year ended December 31,
	2013		2012
Federal and state statutory rate		35%		35%
Change in valuation allowance on deferred tax assets		(35%)		(35%	)

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions as of any date on or before December 31, 2013.

11. COMMITMENTS AND CONTINGENCIES

Employment Agreements

On March 26, 2008, the Company entered into certain employment arrangements with Shawn Davis, its Chief Executive Officer, and Thomas Bianco, its Chief Financial Officer. These arrangements established a respective annual salary of $120,000 for Messrs. Davis and Bianco. Because Messrs. Davis and Bianco have been, and are currently, employed by the Company in critical managerial positions, the Company believes it to be in the best interests of the Company to provide Messrs. Davis and Bianco with certain severance protections and accelerated option vesting in certain circumstances. Effective December 3, 2012, the Company entered into four-year term employment agreements and severance agreements with Messrs. Davis and Bianco. The terms of the employment agreements are substantially similar and establish an annual base salary of $185,000 for each of Messrs. Davis and Bianco, and also provide for certain employee benefits when the Company is financially able to provide for such benefits, or as determined by the Board of Directors.

F-25

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

The terms of the severance agreements are substantially similar and provide for aggregated severance amounts equal to 300% of Messrs. Davis and Bianco’s annual base salary in effect as of the date of the executive’s respective date of termination (the “Severance Amount”). In addition to the Severance Amount, the Company agreed to provide Messrs. Davis and Bianco with full medical, dental, and vision benefits from the date of termination through the third full year following the respective date of termination. The Company also agreed Messrs. Davis and Bianco shall each have one year from the respective date of termination in which to exercise all options that are vested as of the date of termination, subject to any trading window requirements or other restrictions imposed under the Company’s insider trading policy. The severance agreements state that if during the period of time during which Mr. Davis or Mr. Bianco is employed by the Company, a “change of control,” as defined in the severance agreement, occurs, 100% of the unvested portion of all options held by Messrs. Davis and Bianco as of the date of such “change of control” event shall be deemed vested and the executive shall be entitled to exercise such options.

The Company also agreed that if the payments are deemed “golden parachute” payments under the Internal Revenue Code of 1984 and either of Messrs. Davis and Bianco is obligated to pay an excise tax, the Company will reimburse Messrs. Davis and Bianco in full for both the amount of the excise tax, or ordinary income taxes owed in connection with the payment.

As of December 31, 2013, the Company had not paid Messrs. Davis and Bianco their respective new annual salaries of $185,000 and accordingly, the Company owed Messrs. Davis and Bianco accrued and deferred compensation in the amounts of $220,701 and $220,755, respectively.

Amendment to the Amended and Restated Articles of Incorporation

On March 4, 2013, stockholders voted in favor to amend the Company’s Amended and Restated Articles of Incorporation to (a) increase the number of authorized shares of common stock from fifty nine million (59,000,000) shares of common stock to twenty billion (20,000,000,000) shares of common stock; (b) amend the par value of Common Stock from a par value $0.0166 per share to a par value of $0.00004897 per share; (c) amend the Class B Preferred Stock such that the voting rights of Class B shareholders are increased from one hundred votes per share to twenty thousand votes per share; and (d) authorize the issuance of five million (5,000,000) shares of “blank check” preferred stock, 0.0166 par value per share, to be issued in series, and all properties of such preferred stock to be determined by the Company’s Board of Directors. The amendment became effective on July 10, 2013.

Operating Leases

On September 30, 2013, the lease on the Company’s office space located at 3700 E. Tahquitz Drive, Suite 117, Palm Springs, California expired. The Company’s corporate headquarters, including its principal administrative, marketing, technical support, and research and development departments, are presently located in Palm Springs, California, in office and warehouse provided by the Coachella Valley Economic Partnerships (CVEP) iHub division at no cost to the Company. The Company has been assigned one office, consisting of approximately 1,000 squre feet, which has space suitable for assembling and storage of its technology. Due to inactivity, the Company has agreed to move out of its office space at the accelerator campus with the CVEP iHub division. On April 3, 2014 the Company moved out of this space. The Company is in the process of locating suitable office space for its current operations.

Rent expense for the years ended December 31, 2013 and 2012 were $0 and $11,600, respectively.

Legal Matters

Dispute with Vendor

In March 2010, the Company engaged the services of a vendor to complete certain services. Pursuant to the agreement, the Company paid the vendor a total of $70,618 towards the completion of services. The agreement contained a “not to exceed cost” of $89,435. On or about September 21, 2010, the Company issued the vendor 250,000 shares of the Company’s restricted Class A common stock as an incentive for the vendor to deliver services no later than March 1, 2011. The vendor agreed to incrementally deliver work in progress; however, no work was received from the vendor. The vendor requested an additional payment of $18,818, which the Company did not pay. On or about October 4, 2010, the vendor repudiated the agreement. On February 23, 2011, the Company engaged the services of legal counsel and made written demand for the return of the stock certificate and attempted to initiate settlement negotiations. The vendor did not acknowledge receipt of the Company’s demand.

F-26

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

On September 25, 2011, the Company received notice of a Chapter 7 bankruptcy case filed personally by the vendor. The Company has placed a stop order on the certificate it issued on or about September 21, 2010 to the vendor. As of this date hereof, the Company is currently conferring with counsel regarding possible litigation to cancel the stock certificate. The Company’s alleged damages resulting from the vendor’s failure to perform and subsequent repudiation of the contract, including the Company’s lost opportunity costs, should it pursue litigation against the vendor, will need to be established by an economic expert. The vendor could conceivably pursue litigation against the Company for the $18,818 payment; however, the Company believes it is not probable and therefore, a contingent liability for the amount is not warranted.

Dispute with Wakabayashi Fund, LLC

On or about July 30, 2013, Wakabayashi Fund, LLC sent an email advertisement to the Company advertising certain financial services, and the Company responded to request further information. In subsequent telephone conversations, Mr. Stone of Wakabayashi Fund, LLC (the “Fund”) stated that he was a finance professional that previously held a high position in a well-known securities firm and regularly provides services for the purpose of funding public companies, and/or finding good companies for his clients to invest in. After several weeks, and during two telephone conversations with the Company’s executive officers, Mr. Stone stated that several of his close colleagues with whom he had a pre-existing relationship had reviewed the Company’s corporate information, agreed to invest immediately in the Company, and were imminently prepared to send checks to the Company, but that he would not advise them to do so until after the Company issued and delivered a stock certificate for 750,000 shares of the Company’s common stock to the Fund. After Mr. Stone assured the Company’s executive officers that the investment was assured, imminent and forthcoming, and that the Company would be receiving the first of many investment checks from accredited investors within a certain time period after the Fund received the stock certificate, the Company agreed to process the now pending stock certificate. The Company negotiated the size of the stock certificate based on the amount of money Mr. Stone claimed the Fund would deliver in the time period and based on promises he allegedly secured from pre-existing relationships, amounting to an aggregate of $100,000 - $200,000 in funds that he stated would begin arriving at the Company within the first few weeks. The Company indicated an urgent need for capital and believed Mr. Stone would fulfill the promise that was bargained for. As of the date of this report, no funds or offers to provide funds for the Company have been forthcoming from any person claiming any relationship with the Fund or Mr. Stone. The Company believes Mr. Stone’s statements were false and made to induce management into delivering the stock certificate. On May 17, 2013, the Company was notified by its transfer agent that the Fund was attempting to clear a stock certificate. The Company notified its transfer agent to place a stop order on the transaction. On or about July 2, 2013, the Company received an email from its transfer agent with a letter from the Fund’s counsel. On or about July 10, 2013, the Company responded to the Fund’s counsel detailing the facts set forth above and indicated the Company would not process the certificate for 750,000 shares of the Company’s common stock, but in an effort to resolve this matter quickly and efficiently, the Company offered to issue the Fund 50,000 shares of common stock. On September 24, 2013, the Company received a letter from its transfer agent’s counsel in regards to a civil complaint filed by the Fund, naming the Company’s transfer agent as a defendant, requesting issuance of the stock certificate for 750,000 unrestricted shares of the Company’s common stock. The Company has not been named in the suit, but it is prepared to litigate the matter if necessary. As of December 31, 2013 the 750,000 shares remains issued and outstanding.

Default on Convertible Promissory Note

On January 30, 2013, the holder of Convertible Notes presented a demand for immediate payment, as provided in the terms of the notes, of an aggregate of $120,000, representing 150% of the remaining outstanding principal balance of Convertible Notes 1, 2, and 3, together with default interest under the terms of the Notes. Because the Company has failed to pay the remaining principal balance, together with accrued and unpaid interest, upon the maturity dates of Convertible Notes 1, 2, 3, 4 and 5 (collectively, the “Convertible Notes”), the Company is in default under the respective Convertible Notes. The Convertible Notes are held by the same holder. As of the date of this filing, the Company continues to work with the holder of the Convertible Notes. The Company anticipates the parties will be able to resolve the issue amicably. The holder of the Convertible Notes has continued to support the Company and has advanced certain additional funds to the Company beyond the date of the issuance of its demand letter. The holder of the notes could pursue litigation, however, as of the date of this filing has not threatened to do so.

F-27

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

Default of Agreement with vendor for Software

As of December 31, 2013, the Company remains in default under the terms and conditions of an agreement with a software vendor. The vendor has not previously prevented access to the software and continues to bill the Company for its respective monthly payments. The Company is not currently using the software. Due to insignificant revenue and lack of future contract, the Company recognized full impairment of $74,269 related to the software license as of the balance sheet date of December 31, 2012

12. RELATED PARTY TRANSACTIONS

On July 23, 2012, Timothy Smith loaned the Company $10,000. The note was unsecured, bearing no interest and payable in cash or equity on or before October 7, 2013. On June 7, 2013, both parties agreed to convert the outstanding debt obligation into restricted common stock shares.

The Company entered into a stock grant agreement with its then Chief Technology Officer, Huiyou Zhu, on December 10, 2011 and agreed to compensate Mr. Zhu in stock for his services. Mr. Zhu has not be an active officer of the Company since April 2012. As of October 1, 2013, the stock grant agreement has been placed on hold until such time as when the Company has the required capital to resume development on the server and wireless code at which point in time it will again reengage Mr. Zhu’s services and payment for services under the stock grant agreement.

During the period, the Company received $29,436 advances from a related party. The advances are non-interest bearing with no stated maturity. In the event of a default, all payments made by the related party will be converted into the Company’s common stock at a conversion price of $0.13 per share. As of December 31, 2013, the Company is not in default.

On June 8, 2013, the Company released and discharged two Ford F150 vehicles, and all claims of ownership along with the entire remaining debt obligations owed on each vehicle to each of Messrs. Davis and Bianco. Both vehicles were purchased personally by and registered to each of Messrs. Davis and Bianco for business use in a pilot program the Company participated in with a major utility provider. The Company began making payments of $755.70 beginning on June 6, 2011 for the vehicle purchased by Mr. Davis and ended making payments on December 2012. The Company began making payments of $755.70 beginning on June 6, 2011 for the vehicle purchased by Mr. Bianco and ended making payments on December 2012. During the period ended, December 31, 2013, the Company wrote of $70,764 of debt related to balance owed on the two trucks. In association with the truck, the net book value of $65,949 was simultaneously written off. The difference of $4,815 was recorded as additional paid-in capital due to related party relationship.

During the period ended December 31, 2013, Mr. Davis and Bianco each forgave $20,000 worth of their salary; the transaction was recorded as additional paid-in capital. As of December 31, 2013, there is a salary payable of $401,511.

During the period ended December 31, 2013, Mr. Davis and Bianco each received 3,000,000 shares of the Company Class A common stock for services performed. The shares were valued based on the closing price of the fair market value on the date of authorization resulting in a total value of $600,000 which is recorded as compensation expense.

During the same period ended December 31, 2013, Mr. Davis and Bianco contributed $4,647 to the Company to pay off expenses. Repayment is not expect and recorded as additional paid-in capital.

F-28

ATTUNE RTD, INC.

(A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

13. INVESTMENT OFFER

On October 5, 2013, the Company offered an investment opportunity that paid participating investors up to a maximum of five times their initial investment. Under the terms and conditions of the offer, the investment was to be pooled and the return on investment paid to investors was based on the amount they invested and the size of the pool which was fixed at $159,560.00 Half of the proceeds received from the sale of the Company’s products would be consumed by the Company to cover expenses and the other half used to distribute a royalty payment to investors based on their percentage. Three investors participated in the offer and the total amount invested was $22,000. Based on the amounts invested, the Company is obligated to pay the three investors a royalty payment of 6.27%, 6.27%, and 1.25% of the remaining 50% of the proceeds not consumed by the Company, up to a maximum cumulative payout over time equal to five times their initial investment, at which point the investors will be considered to have been paid in full and the agreement terminates. The agreement does not specify when funds are to be distributed, or time duration. As of December 31, 2013, due to lack of revenue and the unlikelihood of future funding the $22,000 is presented on the balance sheet as a royalty payable. 

14.  INVESTMENT AGREEMENT

On June 26, 2013, the Company, entered into an investment agreement (the “Investment Agreement”) with Dutchess Opportunity Fund II, LP (“Dutchess”). Pursuant to the Investment Agreement, Dutchess committed to purchase up to $5,000,000 of the Company’s common stock over thirty-six months from the first day following the effectiveness of a registration statement, subject to certain conditions. 

As soon as the Company has an effective registration statement in place, the Company may draw on the facility from time to time, as and when it determines appropriate in accordance with the terms and conditions of the related investment agreement (“Investment Agreement”). The Company has not yet filed a registration statement registering the shares and therefore, it has not yet sold any shares under the Investment Agreement and it is currently in default under the Investment Agreement. The purchase price will be 95% of the lowest daily volume weighted average price (“VWAP”) of the Company’s common stock during the 5 consecutive trading day period beginning on the trading day immediately following the date of delivery of the applicable put notice. The amount that the Company is entitled to put in on any one notice shall be any amount up to the greater of 1) 200% of the average daily volume of the common stock for the 3 trading days prior to the applicable put notice date, multiplied by the average of the 3 daily closing prices immediately preceding the date of the put or 2) $100,000. Dutchess is not obligated to purchase shares if its total number of shares beneficially held at that time would exceed 4.99% of the number of shares of the Company’s outstanding common stock as determined in accordance with Rule 13d-1 of the Securities Exchange Act of 1934, as amended. In addition, the Company is not permitted to draw on the facility unless there is an effective registration statement to cover the resale of the shares, which it does not currently have in place.

Pursuant to the terms of a Registration Rights Agreement between the Company and Dutchess, the Company is obligated to file a registration statement with the SEC to register the resale by the Investor of shares of the common stock underlying the Investment Agreement and it has not yet done so.

15. SUBSEQUENT EVENTS

Change of Majority Control of the Company

On April 2, 2014, the Company entered into a “Letter of Intent” (the “LOI”) with Beacon Global Partners, LLC, a Wyoming limited liability company (“BGP”). Pursuant to the Agreement, BGP will assume majority control of the Company through the issuance of blank check stock giving them at least 51% voting control in exchange for ongoing financing, an amount to be determined. After due diligence, the Company, along with its Board of Directors, has determined that it is in the best interests of the Company and its shareholders to change majority control of the Company to BGP. After the transaction contemplated by the Agreement, BGP will hold at least 51% of the voting securities of the Company. As of the date hereof, BGP holds 0% of the voting securities of the Company.

F-29

SIGNATURES

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, thereunto duly authorized.

Attune RTD, Inc.
By:	/s/ Shawn Davis
	Shawn Davis
	Chief Executive 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/ Thomas Bianco	Chief Financial Officer and Director	April 15, 2014
Thomas Bianco	(Principal Financial Offer and Chief Accounting Officer)
/s/ Shawn Davis	Chief Executive Officer and Chairman of the Board of Directors	April 15, 2014
Shawn Davis	(Principal Executive Officer)

40

EX-3.7

 

 

Appendix A

The Preferred Stock may be issued from time to time in one or more series, with such distinctive serial designations as may be stated or expressed in the resolution or resolutions providing for the issue of such stock adopted from time to time by the Board of Directors; and in such resolution or resolutions providing for the issuance of shares of each particular series, the Board of Directors is also expressly authorized to fix: The right to vote, if any; the consideration for which the shares of such series are to be issued; the number of shares constituting such series, which number may be increased (except as otherwise fixed by the Board of Directors) or decreased (but not below the number of shares thereof then outstanding) from time to time by action of the Board of Directors; the rate of dividends upon which and the times at which dividends on shares of such series shall be payable and the preference, if any, which such dividends shall have relative to dividends on shares of any other class or classes or any other series of stock of the corporation; whether such dividends shall be cumulative or noncumulative, and if cumulative, the date or dates from which dividends on shares of such series shall be cumulative; the rights, if any, which the holders of shares of such series shall have in the event of any voluntary or involuntary liquidation, merger, consolidation, distribution or sale of assets, dissolution or winding up of the affairs of the corporation; the rights, if any, which the holders of shares of such series shall Have to convert such shares into or exchange such shares for shares of any other class or classes or any other series of stock of the corporation or for any debt securities of the corporation and the terms and conditions, including price and rate of exchange, of such conversion or exchange; whether shares of such series shall be subject to redemption, and the redemption price or prices and other terms of redemption, if any, for shares of such series including, without limitation, a redemption price or prices payable in shares of Common Stock; the terms and amounts of any sinking fund for the purchase or redemption of shares of such series; and any and all other designations, preferences, and relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof pertaining to shares of such series’ permitted by law.

The Board of Directors, of the Corporation may from time to time authorize by resolution the issuance of any or all shares of the Common Stock, the Class B Participating Cumulative Preferred Supervoting Stock and the Preferred Stock herein authorized in accordance with the terms and conditions set forth in these Articles of Incorporation for such purposes, in such amounts, to such persons, corporations or entities, for such consideration, and in the case of the Preferred Stock, in one or more series, all as the Board of Directors in its discretion may determine and. without any vote or other action by the stockholders, except as otherwise required by law. The capital stock, after the amount of the subscription price or par value has been paid in, shall not be subject to assessment to pay the debts of the Corporation.

EX-10.1

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of December 3, 2012, by and between ATTUNE RTD, a Nevada corporation, with headquarters located at 3700 East Tachevah Drive - B l17, Palm Springs, CA 92262 (the “Company”), and ASHER ENTERPRISES, INC., a Delaware corporation, with its address at 1 Linden Place, Suite 207, Great Neck, NY 11021 (the “Buyer”).

WHEREAS:

A. The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);

B. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement an 8% convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $3,000.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, $0.0166 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.

C. The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately below its name on the signature pages hereto; and

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

1. Purchase and Sale of Note.

a. Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

b. Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

c. Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about December 5, 2012, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

2. Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:

a. Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are issuable (i) on account of interest on the Note, (ii) as a result of the events described in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(0 below) pursuant to this Agreement, such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

b. Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

c. Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

d. Information. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company’s representations and warranties made herein.

e. Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

f. Transfer or Re-sale. The Buyer understands that (i) the sale or resale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144. or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company: (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder: and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

g. Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

h. Authorization: Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

i. Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto.

3. Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

a. Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

b. Authorization; Enforcement, (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

c. Capitalization. As of the date hereof, the authorized capital stock of the Company consists of: (i) 59,000,000 shares of Class A Common Stock, $0.0166 par value per share, of which approximately 32,126,757 shares are issued and outstanding; and (ii) 1,000,000 shares of Class B Participating Cumulative Preferred Super Voting Stock, $0.0166 par value per share, of which 1,000,000 shares are issued and outstanding; no shares are reserved for issuance pursuant to the Company’s stock option plans, 4,000,000 shares are reserved for issuance pursuant to securities (other than 900,000 shares in warrants and the Note and (a) a prior convertible promissory note in favor of the Buyer dated September 28, 2011 in the amount of $42,500.00, the principal of which is now reduced to $34,500.00, for which 1,831,837 shares of Common Stock are presently reserved and (b) prior convertible promissory note in favor of the Buyer dated December 7, 2011 in the amount of $42,500.00 for which 5,500,000 shares of Common Stock are presently reserved) exercisable for, or convertible into or exchangeable for shares of Common Stock and 700,000 shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

d. Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

e. Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

f. No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”) and does not reasonably anticipate that the Common Stock will be delisted by the OTCBB in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

g. SEC Documents: Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”). Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to September 30, 2012, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act.

h. Absence of Certain Changes. Since September 30, 2012, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

i. Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

j. Patents. Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); there is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.

k. No Materially Adverse Contracts. Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.

l. Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s tax returns is presently being audited by any taxing authority.

m. Certain Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties and other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

n. Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).

o. Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

p. 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 in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

q. No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

r. Permits: Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Since September 30, 2012, neither the Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

s. Environmental Matters.

(i) There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

(ii) Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s or any of its Subsidiaries’ business.

(iii) There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with applicable law.

t. Title to Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(t) or such as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.

u. Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to directors’ and officers’ liability coverage, errors and omissions coverage, and commercial general liability coverage.

v. Internal Accounting Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

w. Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

x. Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e.. its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.

y. No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “investment Company”). The Company is not controlled by an Investment Company.

z. Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the Note.

4. COVENANTS.

a. Best Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.

b. Form D: Blue Sky Laws. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the Closing Date.

c. Use of Proceeds. The Company shall use the proceeds for general working capital purposes.

d. Right of First Refusal. Unless it shall have first delivered to the Buyer, at least seventy two (72) hours prior to the closing of such Future Offering (as defined herein), written notice describing the proposed Future Offering, including the terms and conditions thereof and proposed definitive documentation to be entered into in connection therewith, and providing the Buyer an option during the seventy two (72) hour period following delivery of such notice to purchase the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence and the preceding sentence are collectively referred to as the “Right of First Refusal”) (and subject to the exceptions described below), the Company will not conduct any equity financing (including debt with an equity component) (“Future Offerings”) during the period beginning on the Closing Date and ending twelve (12) months following the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the seventy two (72) hour period following delivery of such new notice to purchase its pro rata share of the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence shall apply to successive amendments to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall not apply to any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule 415 under the 1933 Act) or (ii) issuances of securities as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company. The Right of First Refusal also shall not apply to the issuance of securities upon exercise or conversion of the Company’s options, warrants or other convertible securities outstanding as of the date hereof or to the grant of additional options or warrants, or the issuance of additional securities, under any Company stock option or restricted stock plan approved by the shareholders of the Company. The Right of First Refusal shall apply only to like transaction (i.e convertible debentures) that are in excess of $150,00.00.

e. Expenses. At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer. The Company’s obligation with respect to this transaction is to reimburse Buyer’ expenses shall be $0.00.

f. Financial Information. Upon written request the Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or other information the Company makes available or gives to such shareholders.

g. [INTENTIONALLY DELETED]

h. Listing. The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the American Stock Exchange (“AMEX”) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the OTCBB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.

i. Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

j. No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

k. Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.4 of the Note.

1. Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

m. Trading Activities. Neither the Buyer nor its affiliates has an open short position in the common stock of the Company and the Buyer agree that it shall not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.

5. Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold), will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement. Nothing in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the Company, at the cost of the Buyer, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

6. Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

a. The Buyer shall have executed this Agreement and delivered the same to the Company.

b. The Buyer shall have delivered the Purchase Price in accordance with Section 1 (b) above.

c. The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

d. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

7. Conditions to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

a. The Company shall have executed this Agreement and delivered the same to the Buyer.

b. The Company shall have delivered to the Buyer the duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

c. The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.

d. The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions relating to the transactions contemplated hereby.

e. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

f. No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

g. The Conversion Shares shall have been authorized for quotation on the OTCBB and trading in the Common Stock on the OTCBB shall not have been suspended by the SEC or the OTCBB.

h. The Buyer shall have received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.

8. Governing Law: Miscellaneous.

a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. 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 New York or in the federal courts located in the state and county of Nassau. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

b. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

c. Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

d. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e. Entire Agreement: Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

f. 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:

If to the Company, to:

ATTUNE RTD

C/O THE COACHELLA VALLEY

ECONOMIC PARTNERSHIP

3111 TAHQUITZ CANYON WAY

PALM SPRINGS CA 92263

If to the Buyer:

ASHER ENTERPRISES, INC.

1 Linden PL, Suite 207

Great Neck, NY. 11021

Attn: Curt Kramer. President

facsimile: 516-498-9894

With a copy by fax only to (which copy shall not constitute notice):

Naidich Wurman Birnbaum & Maday LLP

80 Cuttermill Road, Suite 410

Great Neck, NY 11021

facsimile: 516-466-3555

Each party shall provide notice to the other party of any change in address.

g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

h. Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

i. Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

j. Publicity. The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC, OTCBB or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC, OTCBB (or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).

k. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

I. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

m. Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees. in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

ATTUNE RTD

 

ASHER ENTERPRISES, INC.

By:
Name:	Curt Kramer
Title:	President
	1 Linden PI., Suite 207
	Great Neck. NY. 11021

AGGREGATE SUBSCRIPTION AMOUNT:
Aggregate Principal Amount of Note:	$	3,000.00
Aggregate Purchase Price:	$	3,000.00

3024(3) 12-3-12

tbianco@attunertd.com

sdavis@attunertd.com        

EX-10.2

EMPLOYMENT AGREEMENT

Prior to entering into this EMPLOYMENT AGREEMENT, Shawn Davis (the Executive”) was employed by Attune RTD (“Employer”) in the capacity of Chief Executive Officer/Executive Director. Employer desires to continue to employ the Executive, due to Executive’s certain unique skills, talents, contacts, judgment and knowledge of the Employer’s business, strategies, and objectives, and the Executive desires to be employed by the Employer.

“The parties, intending to be legally bound, agree as follows:

1. Position. Executive will be employed by Employer as its Chief Executive Officer commencing upon Monday December 3^rd, 2012 (the “Commencement Date”) and continuing thereafter until termination pursuant to Section 5. Executive will have overall responsibility for the management of Employer and will report directly to its Board of Directors. Executive will be expected to devote full working time and attention to the business of Employer, and will not render services to any other business without the prior approval of the Board of Directors or, directly or indirectly, engage or participate in any business that is competitive in any manner with the business of Employer. Executive will also be expected to comply with and be bound by the Employer’s personnel policies, operating policies, procedures and practices that are from time to time in effect during the term of Executive’s employment.

2. Cash Compensation. Executive’s annual base salary from the Commencement Date through December 31, 2016 will be $185,000. Base salary will be payable in accordance with Employer’s normal payroll practices with such payroll deductions and withholdings as required by law. Executive may receive an annual bonus each year at the discretion of the Board of Directors, not to exceed $185,000, following the Board’s annual review of Executive’s performance. In subsequent years of employment the Board of Directors, at its own discretion, will determine Executive’s annual base salary and bonus compensation based on the Board’s review of Executive’s performance for the preceding year.

3. Employee Benefits. Executive will receive the following employee benefits [describe]:

a. Vacation, Sick, Holiday and Other Paid Leave.

b. Medical and Dental Insurance.

c. Life Insurance and Long-Term Disability Insurance.

d. Retirement.

e. Other Benefits.

4. Reimbursement of Expenses. Employer shall reimburse Executive for all reasonable travel and other expenses incurred or paid by Executive in connection with, or related to, the performance of Executive’s duties, responsibilities or services under ’{his Agreement, upon presentation by the Executive of documentation, expense statements, vouchers and/or such other supporting information in accordance with standard Employer policies.

5. Termination of Employment. Executive’s employment with Employer will be at-will and may be terminated by Executive or by Employer at any time for any reason as “follows:

a. Executive may terminate employment upon written notice to the Board of Directors at any time for “Good Reason,” as defined below (an “Involuntary Termination”).

b. Executive may terminate employment upon written notice to the Board of Directors at any time in Executive’s discretion without Good Reason (“Voluntary Termination”).

c. Employer may terminate Executive’s employment upon written notice to Executive at any time following a determination by two-thirds (2/3) vote of the Board of Directors then in office that there is “Cause,” as defined below, for such termination (“Termination for Cause”).

d. Employer may terminate Executive’s employment upon written notice to Executive at any time in the sole discretion of the Board of Directors without a determination that there is Cause for such termination (‘Termination without Cause”).

e. Executive’s employment will automatically terminate upon Executive’s death or upon Executive’s disability as determined by the Board of Directors (‘Termination for Death or Disability”); provided that “disability” shall mean Executive’s inability to perform Executive’s job responsibilities for a period of 90 consecutive days or 90 days in the aggregate in any 12-month period.

6. Definitions. As used in this agreement, the following terms have the following meanings:

a. “Good Reason” means (i) a material reduction in Executive’s duties that is inconsistent with Executive’s position as Chief Executive Officer of Employer or a change in Executive’s reporting relationship such that Executive no longer reports directly to the Board of Directors; (ii) Executive is no longer the Chief Executive Officer of Employer; (iii) any reduction in Executive’s annual base salary or bonus compensation (other than in connection with a general decrease in the salary or bonuses for other employees of Employer) without Executive’s consent; (iv) material breach by Employer of any of its obligations hereunder after providing Employer with written notice and an opportunity to cure within seven (7) days; or (v) a requirement by Employer that Executive relocate Employer’s principal office to a facility more than 40 miles from Employer’s current principal office.

b. “Cause” means (i) gross negligence or willful misconduct in the performance of Executive’s duties to Employer (other than as a result of a disability) that has resulted or is likely to result in substantial and material damage to Employer, after a written demand for substantial performance is delivered to Executive by the Board of Directors which specifically identifies the manner in which the Board believes Executive has not substantially performed Executive’s duties and Executive has been provided with a reasonable opportunity, of not less than ten (10) days, to cure any alleged gross negligence or willful misconduct; (ii) commission of any act of fraud with respect to employer; or (iii) conviction of a felony or a crime involving moral turpitude either of which causes material harm to the business and affairs of Employer. No act or failure to act by Executive shall be considered “willful” if done or omitted by Executive in good faith with reasonable belief that Executive’s action or omission was in the best interests of Employer.

7. Separation Benefits governed by separate “Severance Agreement”.

A. Rights to Work Product. All work products developed by Executive pursuant to this Agreement shall be the property of Employer, and Employer shall hold all rights thereon, if any. Executive hereby irrevocably transfers and assigns to Employer any and all of Executive’s right, title, and interest in and to all work products, methods, procedures, diagrams, tables, databases, documentation, know-how, trade secrets, modifications, improvements, derivative works of the foregoing, and other information developed by Executive in the performance of services under this Agreement (“Work Product”), including all worldwide patent rights (including patent applications and disclosures), copyright rights, trade secret rights, know-how, and any and all other intellectual property or proprietary rights therein (collectively, “Intellectual Property Rights”). Executive further agrees that any Work Product developed in the course of performing services are “works for hire” under the Copyright Act and that Employer shall be considered the owner of the Work Product. Executive agrees to execute such documents, render such assistance, and take such other actions as Employer may reasonably request to apply for, register, perfect, confirm, enforce and protect Employer’s rights in the Work Product.

9. Confidential Information. Executive acknowledges that in the performance of services Executive may be granted access to, or there may be disclosed to Executive, information, including research plans, fund proposals, methodology, know-how, data, trade secrets, technical information or other information that is confidential in nature and of great proprietary and competitive value to Employer. All such information, whether or not such information is reduced to writing, patented, copyrighted, or trademarked, will be deemed “Confidential Information” unless the same (a) was in the public domain at the time it was disclosed; (b) enters the public domain without violation of this Agreement; (c) was known to Executive, without restriction as to use or disclosure, at the time of the disclosure; or (d) becomes known to Executive from a third party without breach of this Agreement. Executive will not disclose to any third party any Confidential information without Employer’s written consent and will not use Confidential Information except to perform Executive’s obligations under this Agreement. Executive will use reasonable efforts to keep Confidential Information in confidence. Notwithstanding anything in this Agreement, executive may disclose Confidential Information pursuant to a court order, provided that Executive (a) first provides Employer with prior written notice and a reasonable opportunity to oppose such disclosure; and (b) reasonably cooperates with Employer to limit disclosure of the Confidential Information.

For the purposes of this Agreement, Work Product will be considered Confidential information of Employer. Upon the expiration or termination of this Agreement, Executive will promptly notify Employer of any Confidential Information in Executive’s possession or control, and in accordance with Employer instructions will promptly return all such Confidential Information. Executive shall not retain any copy, duplicate, or note memorializing any such Confidential Information.

10. Authority. Employer represents that Shawn Davis, its Chairperson of the Board, has due authority to execute and deliver this Agreement on behalf of Employer.

11. Successors. This Agreement is binding on and may be enforced by Employer and its successors and assigns and is binding on and may be enforced by executive and Executive’s heirs and legal representatives. Any successor to Employer or substantially all of its business, whether by purchase, merger, consolidation, or otherwise, will in advance assume in writing and be bound by all of Employer’s obligations under this Agreement.

12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

13. Entire Agreement; Amendments. This Agreement contains the entire agreement of the parties with respect to the matters contained herein and supersedes all prior written or oral agreements or understandings in respect thereof. No change, modification, or waiver of any provision shall be valid unless in writing and signed by both parties.

14. Interpretation. No term, provision, or part of this Agreement shall be interpreted for or against either party because that party or its legal representative drafted such term, provision, or part of this Agreement.

15. Waiver. The waiver of any breach of any provision of this Agreement shall not constitute a waiver of any subsequent breach of the same or other provisions hereof.

16. Severability. Should any term, provision, or part of this Agreement be declared void or invalid, the validity of the remaining terms, provisions, or parts shall not be “affected.

17. Notice. All notices to be given by one party to the other under this Agreement shall be given in writing and mailed or delivered to the other party at its address given to the other party for purposes of notice.

18. Attorneys’ Fees. If any action is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled.

EXECUTIVE		ATTUNE RTD
BY:
Date: 12/10/12		Date: 12/10/12

SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT (the “Agreement”), is made and entered into this 23^rd day of November, 2012 (the “Effective Date”) by and between Attune RTD., a Nevada corporation with its principal place of business at 3700B Tachevah Road, Suite 117, Palm Springs, CA 92262 (“Attune RTD” or the “Company”), and Shawn Davis (“Davis” or the Employee”).

RECITALS

WHEREAS, Employee has been, and is currently, employed by the Company in a critical managerial position with the Company;

WHEREAS, Employee is currently employed by the Company on an at-will basis; and

WHEREAS, Employee and the Company each believe it to be in their best interests to provide Employee with certain severance protections and accelerated option vesting in certain circumstances

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Employment. The Company hereby agrees to continue Employee’s current employment as its Chief Financial Officer unless terminated earlier in accordance with provisions contained herein below. The Employee shall be based at the Company’s headquarters in Palm Springs, California or such other place within a 40-mile radius thereof, as may be reasonably requested by the Company. The Employee shall be subject to the supervision of, and shall have such authority as is delegated to him by, the Board of Directors (the “Board”), as the case may be.

2. Effect of Termination.

2.2 Termination at the Election of the Company or the Employee for Good Reason.

If the Employee’s employment is terminated (i) other than for cause (as defined hereinbelow) by the Company or (ii) by the Employee for good reason (as defined hereinbelow), the Company shall pay to Employee an aggregate severance amount equal to 300% of the Employee’s annual base salary in effect as of the date of such termination (i.e., three years base salary and such amount being referred to as the “Severance Amount”). At the discretion of the Company, payment of the Severance Amount may be made in either a single lump sum amount or in periodic payments consistent with the Company’s payroll policies and practices. In addition to the Severance Amount, the Company shall provide Employee with full medical, dental, and vision benefits through the third full year following the date of Employee’s termination.

For the purposes of this Section 2.1, termination “for cause” shall be deemed to exist upon:

(d) the conviction of the Employee of, or the entry of a pleading of guilty or nolo contendere by the Employee to, any crime involving moral turpitude that may reasonably adversely reflect on the Company or any felony;

(e) willful misconduct in connection with the Employee’s duties or willful failure to use reasonable effort to perform substantially his responsibilities in the best interest of the Company (including, without limitation, breach by the Employee of this Agreement), except in cases involving the mental or physical incapacity or disability of the Employee; provided however, that the Company may terminate the Employee’s employment

pursuant to this subsection (b) only after the failure by the Employee to correct or cure, or to commence and continue to pursue the correction or curing of, such refusals within 30 days after receipt by the Employee of written notice by the Company of each specific claim of any such misconduct or failure. The Employee shall have the opportunity to appear before the Board to discuss such written notice during such 30-day period. “Willful misconduct” and “willful failure to perform” shall not include actions or inactions on the part of the Employee that were taken or not taken in good faith by the Employee; and

(f) fraud, material dishonesty, or gross misconduct in connection with the Company perpetuated by the Employee.

For the purposes of this Section 2.1, “good reason” shall be deemed to exist when there occurs: (A) a material change in the reporting responsibilities of the Employee to someone other than the Board; (B) a substantial diminution of the Employee’s responsibilities; (C) any reduction in the Employee’s level of compensation without the approval of the Employee; or (D) a transfer of the Employee’s work location for purposes of performing his duties hereunder to a location that is beyond a 40-mile radius from the Company’s current headquarters location in Palm Springs, California.

2.2 Extension of Option Exercise Period: Acceleration of Option Vesting.

(a) Notwithstanding anything to the contrary contained in the exercise provisions of any of Employee’s existing agreements governing the granting and exercising of options to purchase shares of the Company’s Common Stock, irrespective of whether such options are incentive stock options (“ISO”s) or nonstatutory stock options (“Nonquals”) or any such agreements executed by the Employee and the Company subsequent to the Effective Date, the Company agrees that Employee shall have one year from the Employee’s termination date in which to exercise all options that are vested as of the date upon which Employee’s employment was terminated, subject to any trading window requirements or other restrictions imposed under the Company’s insider trading policy. This subsection 2.2(a) hereby (i) amends and shall be deemed an amendment to the exercise provisions of each and every existing agreement of Employee’s governing the granting and exercising of options (both ISO and Nonqual) and (ii) unless this Agreement is amended to the contrary, is deemed incorporated by reference into any agreement between the Employee and the Company governing the granting and exercising of options (both ISO and Nonqual) executed subsequent to the date hereof, as though such provision were restated therein in their entirety.

(b) Notwithstanding anything to the contrary contained in the exercise provisions of any of Employee’s existing agreements governing the granting and exercising of ISOs and Nonquals or any such agreements executed by the Employee and the Company subsequent to the Effective Date, if during the period of time during which Employee is employed by the Company a Change of Control Event (as defined below) occurs, 100% of the unvested portion of all options held by Employee as of the date of Change of Control Event shall be deemed vested and Employee shall be entitled to exercise such options during the time period described in subsection 2.2(a). For purposes of this section 2.2(b) a “Change of Control Event” shall be deemed to exist if there occurs either:

(v) a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or

(vi) the sale, transfer or other disposition of all or substantially all of the Company’s assets in complete liquidation or dissolution of the Company.

3. Gross Up for Tax Treatment. The Company agrees that if

(c) because of the operation of any of the provisions of this Agreement, the payments to be made to Employee and the acceleration of option vesting hereunder are deemed “golden parachute payments” under the Internal Revenue Code of 1984, as amended, and

(d) Employee is obligated to pay an excise tax associated with such golden parachute

payments,

the Company shall reimburse the Employee in full for both (i) the amount of any such excise tax owed upon such golden parachute payments and (ii) any excise or ordinary income taxes owed in connection with the payment of the amount described in the preceding clause (i) (such payments being referred to as the “gross up amounts”).

4. Entire Agreement. This Agreement and the exhibits hereto constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.

5. Amendment. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Employee.

6. Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the Commonwealth of Virginia.

7. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business, provided, however, that the obligations of the Employee are personal and shall not be assigned by him.

9. Waiver of Jury Trial. The parties agree that they have waived their right to a jury trial with respect to any controversy, claim, or dispute arising out of or relating to this Agreement, or the breach thereof, or arising out of or relating to the employment of the Employee, or the termination thereof, including any claims under federal, state, or local law, and that any such controversy, claim, or dispute shall be heard and adjudicated in the state courts of the Commonwealth of Virginia, in Fairfax County.

IN WITNESS WHEREOF, the parties hereto have executed this Severance Agreement as of the day and year set forth above.

VASTERA, INC.
By:	/s/ Shawn Davis
	Shawn Davis
	CEO
By:	/s/ Thomas Scott Bianco     C.F.O
	Thomas Scott Bianco         For the Company
	Chief Financial Officer
EMPLOYEE
	/s/ Shawn Davis         For the Company
	Shawn Davis     C.E.O

EX-10.3

EMPLOYMENT AGREEMENT

Prior to entering into this EMPLOYMENT AGREEMENT, Thomas Scott Bianco (the “Executive”) was employed by Attune RTD (“Employer”) in the capacity of Chief financial Officer/Executive Director. Employer desires to continue to employ the Executive, due to Executive’s certain unique skills, talents, contacts, judgment and knowledge of the Employer’s business, strategies, and objectives, and the Executive desires to be employed by the Employer.

The parties, intending to be legally bound, agree as follows:

1. Position. Executive will be employed by Employer as its Chief Financial Officer commencing upon Monday December 3^rd, 2012 (the “Commencement Date”) and continuing thereafter until termination pursuant to Section 5. Executive will have overall responsibility for the management of Employer and will report directly to its Board of Directors. Executive will be expected to devote full working time and attention to the business of Employer, and will not render services to any other business without the prior approval of the Board of Directors or, directly or indirectly, engage or participate in any business that is competitive in any manner with the business of Employer. Executive will also be expected to comply with and be bound by the Employer’s personnel policies, operating policies, procedures and practices that are from time to time in effect during the term of Executive’s employment.

2. Cash Compensation. Executive’s annual base salary from the Commencement Date through December 31, 2016 will be $185,000. Base salary will be payable in accordance with Employer’s normal payroll practices with such payroll deductions and withholdings as required by law. Executive may receive an annual bonus each year at the discretion of the Board of Directors, not to exceed $185,000, following the Board’s annual review of Executive’s performance. In subsequent years of employment the Board of Directors, at its own discretion, will determine Executive’s annual base salary and bonus compensation based on the Board’s review of Executive’s performance for the preceding year.

3. Employee Benefits. Executive will receive the following employee benefits [describe]:

a. Vacation, Sick, Holiday and Other Paid Leave.

b. Medical and Dental Insurance.

c. Life Insurance and Long-Term Disability Insurance.

d. Retirement.

e. Other Benefits.

4. Reimbursement of Expenses. Employer shall reimburse Executive for all reasonable travel and other expenses incurred or paid by Executive in connection with, or related to, the performance of Executive’s duties, responsibilities or services under this Agreement, upon presentation by the Executive of documentation, expense statements, vouchers and/or such other supporting information in accordance with standard Employer policies.

5. Termination of Employment. Executive’s employment with Employer will be at- will and may be terminated by Executive or by Employer at any time for any reason as follows:

a. Executive may terminate employment upon written notice to the Board of Directors at any time for “Good Reason,” as defined below (an “Involuntary Termination”).

b. Executive may terminate employment upon written notice to the Board of Directors at any time in Executive’s discretion without Good Reason (“Voluntary germination”).

c. Employer may terminate Executive’s employment upon written notice to Executive at any time following a determination by two-thirds (2/3) vote of the Board of Directors then in office that there is “Cause,” as defined below, for such termination (“Termination for Cause”).

d. Employer may terminate Executive’s employment upon written notice to Executive at any time in the sole discretion of the Board of Directors without a determination that there is Cause for such termination (‘Termination without Cause”).

e. Executive’s employment will automatically terminate upon Executive’s death or upon Executive’s disability as determined by the Board of Directors (“Termination for Death or Disability”); provided that “disability” shall mean Executive’s inability to perform Executive’s job responsibilities for a period of 90 consecutive days or 90 days in the aggregate in any 12-month period.

6. Definitions. As used in this agreement, the following terms have the following meanings:

a. “Good Reason” means (i) a material reduction in Executive’s duties that is inconsistent with Executive’s position as Chief Financial Officer/Treasurer of Employer or a change in Executive’s reporting relationship such that Executive no longer reports directly to the Board of Directors; (ii) Executive is no longer the Chief Financial Officer/Treasurer of Employer; (iii) any reduction in Executive’s annual base salary or bonus compensation (other than in connection with a general decrease in the salary or bonuses for other employees of Employer) without Executive’s consent; (iv) material breach by Employer of any of its obligations hereunder after providing Employer with written notice and an opportunity to cure within seven (7) days; or (v) a requirement by Employer that Executive relocate Employer’s principal office to a facility more than 40 miles from Employer’s current principal office.

b. “Cause” means (i) gross negligence or willful misconduct in the performance of Executive’s duties to Employer (other than as a result of a disability) that has resulted or is likely to result in substantial and material damage to Employer, after a written demand for substantial performance is delivered to Executive by the Board of Directors which specifically identifies the manner in which the Board believes Executive has not Substantially performed Executive’s duties and Executive has been provided with a reasonable opportunity, of not less than ten (10) days, to cure any alleged gross negligence or willful misconduct; (ii) commission of any act of fraud with respect to Employer; or (iii) conviction of a felony or a crime involving moral turpitude either of which causes material harm to the business and affairs of Employer. No act or failure to act by Executive shall be considered “willful” if done or omitted by Executive in good faith with reasonable belief that Executive’s action or omission was in the best interests of Employer.

7. Separation Benefits governed by separate “Severance Agreement”.

8. Rights to Work Product. All work products developed by Executive pursuant to this Agreement shall be the property of Employer, and Employer shall hold all rights thereon, if any. Executive hereby irrevocably transfers and assigns to Employer any and all of Executive’s right, title, and interest in and to all work products, methods, procedures, diagrams, tables, databases, documentation, know-how, trade secrets, modifications, improvements, derivative works of the foregoing, and other information developed by Executive in the performance of services under this Agreement (“Work Product”), including all worldwide patent rights (including patent applications and disclosures), copyright rights, trade secret rights, know-how, and any and all other intellectual property or proprietary rights therein (collectively, “Intellectual Property Rights”). Executive further agrees that any Work Product developed in the course of performing services are “works for hire” under the Copyright Act and that Employer shall be considered the owner of the Work Product. Executive agrees to execute such documents, render such assistance, and take such other actions as Employer may reasonably request to apply for, register, perfect, confirm, enforce and protect Employer’s rights in the Work Product.

9. Confidential Information. Executive acknowledges that in the performance of services Executive may be granted access to, or there may be disclosed to Executive, information, including research plans, fund proposals, methodology, know-how, data, trade secrets, technical information or other information that is confidential in nature and of great proprietary and competitive value to Employer. All such information, whether or not such information is reduced to writing, patented, copyrighted, or trademarked, will be deemed “Confidential Information” unless the same (a) was in the public domain at the time it was disclosed; (b) enters the public domain without violation of this Agreement; (c) was known to Executive, without restriction as to use or disclosure, at the time of the disclosure; or (d) becomes known to Executive from a third party without breach of this Agreement. Executive will not disclose to any third party any Confidential Information without Employer’s written consent and will not use Confidential Information except to perform Executive’s obligations under this Agreement. Executive will use reasonable efforts to keep Confidential Information in confidence. Notwithstanding anything in this Agreement, executive may disclose Confidential Information pursuant to a court order, provided that Executive (a) first provides Employer with prior written notice and a reasonable opportunity to oppose such disclosure; and (b) reasonably cooperates with Employer to limit disclosure of the Confidential Information.

For the purposes of this Agreement, Work Product will be considered Confidential Information of Employer. Upon the expiration or termination of this Agreement, Executive will promptly notify Employer of any Confidential Information in Executive’s possession or control, and in accordance with Employer” instructions will promptly return all such Confidential Information. Executive shall not retain any copy, duplicate, or note memorializing any such Confidential Information.

10. Authority. Employer represents that Shawn Davis, its Chairperson of the Board, has due authority to execute and deliver this Agreement on behalf of Employer.

11. Successors. This Agreement is binding on and may be enforced by Employer and its successors and assigns and is binding on and may be enforced by executive and Executive’s heirs and legal representatives. Any successor to Employer or substantially all of its business, whether by purchase, merger, consolidation, or otherwise, will in advance assume in writing and be bound by all of Employer’s obligations under this Agreement.

12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

13. Entire Agreement; Amendments. This Agreement contains the entire agreement of the parties with respect to the matters contained herein and supersedes all prior written or oral agreements or understandings in respect thereof. No change, modification, or waiver of any provision shall be valid unless in writing and signed by both parties.

14. Interpretation. No term, provision, or part of this Agreement shall be interpreted for or against either party because that party or its legal representative drafted such term, provision, or part of this Agreement.

15. Waiver. The waiver of any breach of any provision of this Agreement shall not constitute a waiver of any subsequent breach of the same or other provisions hereof.

16. Severability. Should any term, provision, or part of this Agreement be declared void or invalid, the validity of the remaining terms, provisions, or parts shall not be affected.

17. Notice. All notices to be given by one party to the other under this Agreement shall be given in writing and mailed or delivered to the other party at its address given to the other party for purposes of notice.

18. Attorneys’ Fees. If any action is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled.

EXECUTIVE		ATTUNE RTD
	C.F.O	By:		C.EO
Date:12/10/12		Date:12/10/12

SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT (the “Agreement”), is made and entered into this 23^rd day of November, 2012 (the “Effective Date”) by and between Attune RTD., a Nevada corporation with its principal place of business at 3700B Tachevah Road, Suite 117, Palm Springs, CA 92262 (“Attune RTD” or the “Company”), and Thomas Scott Bianco (“Bianco” or the “Employee”).

RECITALS

WHEREAS, Employee has been, and is currently, employed by the Company in a critical managerial position with the Company;

WHEREAS, Employee is currently employed by the Company on an at-will basis; and

WHEREAS, Employee and the Company each believe it to be in their best interests to provide Employee with certain severance protections and accelerated option vesting in certain circumstances

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Employment. The Company hereby agrees to continue Employee’s current employment as its Chief Financial Officer unless terminated earlier in accordance with provisions contained herein below. The Employee shall be based at the Company’s headquarters in Palm Springs, California or such other place within a 40-mile radius thereof, as may be reasonably requested by the Company. The Employee shall be subject to the supervision of, and shall have such authority as is delegated to him by, the Board of Directors (the “Board”), as the case may be.

2. Effect of Termination.

2.2 Termination at the Election of the Company or the Employee for Good Reason.

If the Employee’s employment is terminated (i) other than for cause (as defined hereinbelow) by the Company or (ii) by the Employee for good reason (as defined hereinbelow), the Company shall pay to Employee an aggregate severance amount equal to 300% of the Employee’s annual base salary in effect as of the date of such termination (i.e., three years base salary and such amount being referred to as the “Severance Amount”). At the discretion of the Company, payment of the Severance Amount may be made in either a single lump sum amount or in periodic payments consistent with the Company’s payroll policies and practices. In addition to the Severance Amount, the Company shall provide Employee with full medical, dental, and vision benefits through the third full year following the date of Employee’s termination.

For the purposes of this Section 2.1, termination “for cause” shall be deemed to exist upon:

(d)

the conviction of the Employee of, or the entry of a pleading of guilty or nolo contendere by the Employee to, any crime involving moral turpitude that may reasonably adversely reflect on the Company or any felony;

(e)

willful misconduct in connection with the Employee’s duties or willful failure to use reasonable effort to perform substantially his responsibilities in the best interest of the Company (including, without limitation, breach by the Employee of this Agreement), except in cases involving the mental or physical incapacity or disability of the Employee; provided however, that the Company may terminate the Employee’s employment

pursuant to this subsection (b) only after the failure by the Employee to correct or cure, or to commence and continue to pursue the correction or curing of, such refusals within 30 days after receipt by the Employee of written notice by the Company of each specific claim of any such misconduct or failure. The Employee shall have the opportunity to appear before the Board to discuss such written notice during such 30-day period. “Willful misconduct” and “willful failure to perform” shall not include actions or inactions on the part of the Employee that were taken or not taken in good faith by the Employee; and

(f)

fraud, material dishonesty, or gross misconduct in connection with the Company perpetuated by the Employee.

For the purposes of this Section 2.1, “good reason” shall be deemed to exist when there occurs: (A) a material change in the reporting responsibilities of the Employee to someone other than the Board; (B) a substantial diminution of the Employee’s responsibilities; (C) any reduction in the Employee’s level of compensation without the approval of the Employee; or (D) a transfer of the Employee’s work location for purposes of performing his duties hereunder to a location that is beyond a 40-mile radius from the Company’s current headquarters location in Palm Springs, California.

2.2 Extension of Option Exercise Period: Acceleration of Option Vesting.

(a)

Notwithstanding anything to the contrary contained in the exercise provisions of any of Employee’s existing agreements governing the granting and exercising of options to purchase shares of the Company’s Common Stock, irrespective of whether such options are incentive stock options (“ISO”s) or nonstatutory stock options (“Nonquals”) or any such agreements executed by the Employee and the Company subsequent to the Effective Date, the Company agrees that Employee shall have one year from the Employee’s termination date in which to exercise all options that are vested as of the date upon which Employee’s employment was terminated, subject to any trading window requirements or other restrictions imposed under the Company’s insider trading policy. This subsection 2.2(a) hereby (i) amends and shall be deemed an amendment to the exercise provisions of each and every existing agreement of Employee’s governing the granting and exercising of options (both ISO and Nonqual) and (ii) unless this Agreement is amended to the contrary, is deemed incorporated by reference into any agreement between the Employee and the Company governing the granting and exercising of options (both ISO and Nonqual) executed subsequent to the date hereof, as though such provision were restated therein in their entirety.

(b)

Notwithstanding anything to the contrary contained in the exercise provisions of any of Employee’s existing agreements governing the granting and exercising of ISOs and Nonquals or any such agreements executed by the Employee and the Company subsequent to the Effective Date, if during the period of time during which Employee is employed by the Company a Change of Control Event (as defined below) occurs, 100% of the unvested portion of all options held by Employee as of the date of Change of Control Event shall be deemed vested and Employee shall be entitled to exercise such options during the time period described in subsection 2.2(a). For purposes of this section 2.2(b) a “Change of Control Event” shall be deemed to exist if there occurs either:

(v)

a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or

(vi)

the sale, transfer or other disposition of all or substantially all of the Company’s assets in complete liquidation or dissolution of the Company.

3. Gross Up for Tax Treatment. The Company agrees that if

(c)

because of the operation of any of the provisions of this Agreement, the payments to be made to Employee and the acceleration of option vesting hereunder are deemed “golden parachute payments” under the Internal Revenue Code of 1984, as amended, and

(d)

Employee is obligated to pay an excise tax associated with such golden parachute payments,

the Company shall reimburse the Employee in full for both (i) the amount of any such excise tax owed upon such golden parachute payments and (ii) any excise or ordinary income taxes owed in connection with the payment of the amount described in the preceding clause (i) (such payments being referred to as the “gross up amounts”).

4. Entire Agreement. This Agreement and the exhibits hereto constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.

5. Amendment. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Employee.

6. Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the Commonwealth of Virginia.

7. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business, provided, however, that the obligations of the Employee are personal and shall not be assigned by him.

9. Waiver of Jury Trial. The parties agree that they have waived their right to a jury trial with respect to any controversy, claim, or dispute arising out of or relating to this Agreement, or the breach thereof, or arising out of or relating to the employment of the Employee, or the termination thereof, including any claims under federal, state, or local law, and that any such controversy, claim, or dispute shall be heard and adjudicated in the state courts of the Commonwealth of Virginia, in Fairfax County.

IN WITNESS WHEREOF, the parties hereto have executed this Severance Agreement as of the day and year set forth above.

VASTERA, INC.
By:	/s/ Shawn Davis For the Company
	Shawn Davis
	CEO
By:	/s/ Thomas Scott Bianco
	Thomas Scott Bianco
	Chief Fiancial Officer
EMPLOYEE
Thomas Scott Bianco

EX-10.4

NAIDIGH WURMAN BIRNBAUM & MADAY, LLP

 

80 Cuttermill Road, Suite 410

Great Neck, New York 11021

Telephone (516) 498-2900

Facsimile (516) 466-3555

Richard S. Naidich	Mark Birnbaum
Kenneth H. Wurman	Bernard S. Feldman
Ronald C. Maday (Ret.)	Robert P. Johnson
________	Of Counsel
Judah A. Eisner

January 30, 2013

Via Federal Express

ATTUNE RTD

3700 East Tachevah Drive - B117

Palm Springs, CA 92262

Attn: THOMAS BIANCO, Chief Financial Officer

Re: Asher Enterprises . Inc. with ATTUNE RTD

Dear Mr. Bianco:

As you know, Asher Enterprises, Inc. (the “Investor”) advanced funds to ATTUNE RTD a Nevada corporation (the “Company”) and the Company entered into, among other things three Convertible Promissory Notes (i) dated September 28, 2011 in the principal amount of $42,500.00 (which principal amount has since been reduced to $34,500.00, by Asher exercising its conversion rights); (ii) dated December 7, 2011 in the principal amount of $42,500.00 and (iii) dated December 3, 2012 in the principal amount of $3,000.00, each bearing a per annum interest rate of 8% (the “Notes”). The Note provide in pertinent part that the Company shall be in default if it fails to pay principal or interest when due on this Note. The Notes by its terms had a maturity date of July 3, 2012 September 12, 2012 and September 5, 2013 and the Company failed to pay the remaining principal balance together with accrued and unpaid interest upon the maturity date.

Based upon the: foregoing, the Company is now in default under the Note. Demand is hereby made for the immediate payment as provided in the Notes of $120,000.00 (representing 150% of the remaining; outstanding principal balance) together with Default Interest as provided for in the Notes (the “Default Amount”). Your failure to comply with the demands of this letter will result in the investor exercising all rights under the Notes. Additionally, should the Default Amount not be paid within 5 business days from the date of this letter, in addition to all the other rights and remedies available to it, the Investor shall in its sole discretion convert the Default Amount into equity as provided for in the Notes

Very truly yours,

 

Bernard S. Feldman, Of Counsel

EX-10.5

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of February 21, 2013, by and between ATTUNE RTD, a Nevada corporation, with headquarters located at 3111 Tahquitz Canyon Way, Palm Springs, CA 92263 (the "Company"), and ASHER ENTERPRISES, INC., a Delaware corporation, with its address at 1 Linden Place, Suite 207, Great Neck, NY 11021 (the "Buyer").

WHEREAS:

A. The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "1933 Act");

B. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement an 8% convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $50,000.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the "Note"), convertible into shares of common stock, $0.0166 par value per share, of the Company (the "Common Stock"), upon the terms and subject to the limitations and conditions set forth in such Note.

C. The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately below its name on the signature pages hereto; and

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

1.Purchase and Sale of Note.

a.Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer's name on the signature pages hereto.

b. Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the "Purchase Price") by wire transfer of immediately available funds to the Company, in accordance with the Company's written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer's name on the signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

c. Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the "Closing Date") shall be 12:00 noon, Eastern Standard Time on or about February 25, 2013, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the "Closing") shall occur on the Closing Date at such location as may be agreed to by the parties.

2.Buyer's Representations and Warranties.The Buyer represents and warrants to the Company that:

a.Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are issuable (i) on account of interest on the Note, (ii) as a result of the events described in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f) below) pursuant to this Agreement, such shares of Common Stock being collectively referred to herein as the "Conversion Shares" and, collectively with the Note, the "Securities") for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

b. Accredited Investor Status. The Buyer is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D (an "Accredited Investor").

c.Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

d. Information. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer's right to rely on the Company's representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's representations and warranties made herein.

2

e.Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

f.Transfer or Re-sale. The Buyer understands that (i) the sale or resale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an "affiliate" (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) ("Rule 144")) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) ("Regulation S"), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

g. Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

3

"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SATO ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

h. Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

i.Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer's name on the signature pages hereto.

3.Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

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a. Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. "Material Adverse Effect" means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. "Subsidiaries" means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

b. Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company's Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

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c. Capitalization. As of the date hereof, the authorized capital stock of the Company consists of: (i) 59,000,000 shares of Class A Common Stock, $0.0166 par value per share, of which approximately 38,126,716 shares are issued and outstanding; and (ii) 1,000,000 shares of Class B Participating Cumulative Preferred Super Voting Stock, $0.0166 par value per share, of which 1,000,000 shares are issued and outstanding; no shares are reserved for issuance pursuant to the Company's stock option plans, 4,000,000 shares are reserved for issuance pursuant to securities (other than 900,000 shares in warrants and the Note and three (3) prior convertible promissory notes in favor of the Buyer: (a) a prior convertible promissory note in favor of the Buyer dated September 28, 2011 in the amount of $42,500.00, the principal of which is now reduced to $34,500.00, for which 1,831,837 shares of Common Stock are presently reserved; (b) prior convertible promissory note in favor of the Buyer dated December 7, 2011 in the amount of $42,500.00 for which 5,500,000 shares of Common Stock are presently reserved and (c) prior convertible promissory note in favor of the Buyer dated December 3, 2012 in the amount of $3,000.00 for which 700,000 shares of Common Stock are presently reserved) exercisable for, or convertible into or exchangeable for shares of Common Stock and 5,068,163 shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company's Certificate of Incorporation as in effect on the date hereof ("Certificate of Incorporation"), the Company's By-laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company's Chief Executive on behalf of the Company as of the Closing Date.

d. Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

e. Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

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f. No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the "OTCBB") and does not reasonably anticipate that the Common Stock will be delisted by the OTCBB in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

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g.SEC Documents; Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act") (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the "SEC Documents"). Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to September 30, 2012, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act.

h. Absence of Certain Changes. Since September 30, 2012, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

i.Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

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j.Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade names and copyrights ("Intellectual Property") necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); there is no claim or action by any person pertaining to, or proceeding pending, or to the Company's knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company's knowledge, the Company's or its Subsidiaries' current and intended products, services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.

k. No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company's officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company's officers has or is expected to have a Material Adverse Effect.

l.Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company's tax returns is presently being audited by any taxing authority.

m. Certain Transactions. Except for arm's length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties and other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

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n. Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company's reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).

o. Acknowledgment Regarding Buyer' Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm's length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer' purchase of the Securities. The Company further represents to the Buyer that the Company's decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

p. 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 in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company's securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

q. No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

r. Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively, the "Company Permits"), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Since September 30, 2012, neither the Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

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s.Environmental Matters.

(i) There are, to the Company's knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company's knowledge, threatened in connection with any of the foregoing. The term "Environmental Laws" means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, "Hazardous Materials") into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

(ii)Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company's or any of its Subsidiaries' business.

(iii) There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with applicable law.

t.Title to Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(t) or such as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.

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u. Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to directors' and officers' liability coverage, errors and omissions coverage, and commercial general liability coverage.

v. Internal Accounting Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company's board of directors, to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

w. Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

x.Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.

y. No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an "investment company" required to be registered under the Investment Company Act of 1940 (an "Investment Company"). The Company is not controlled by an Investment Company.

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z.Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the Note.

4. COVENANTS.

a. Best Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.

b. Form D; Blue Sky Laws. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or "blue sky" laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the Closing Date.

c. Use of Proceeds. The Company shall use the proceeds for general working capital purposes.

d. Right of First Refusal. Unless it shall have first delivered to the Buyer, at least seventy two (72) hours prior to the closing of such Future Offering (as defined herein), written notice describing the proposed Future Offering, including the terms and conditions thereof and proposed definitive documentation to be entered into in connection therewith, and providing the Buyer an option during the seventy two (72) hour period following delivery of such notice to purchase the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence and the preceding sentence are collectively referred to as the "Right of First Refusal") (and subject to the exceptions described below), the Company will not conduct any equity financing (including debt with an equity component) ("Future Offerings") during the period beginning on the Closing Date and ending twelve (12) months following the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the seventy two (72) hour period following delivery of such new notice to purchase its pro rata share of the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence shall apply to successive amendments to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall not apply to any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule 415 under the 1933 Act) or (ii) issuances of securities as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company. The Right of First Refusal also shall not apply to the issuance of securities upon exercise or conversion of the Company's options, warrants or other convertible securities outstanding as of the date hereof or to the grant of additional options or warrants, or the issuance of additional securities, under any Company stock option or restricted stock plan approved by the shareholders of the Company. The Right of First Refusal shall apply only to like transaction (i.e convertible debentures) that are in excess of $150,00.00.

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e. Expenses. At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith ("Documents"), including, without limitation, reasonable attorneys' and consultants' fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer. The Company's obligation with respect to this transaction is to reimburse Buyer' expenses shall be $2,500.

f. Financial Information. Upon written request the Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or other information the Company makes available or gives to such shareholders.

g.[INTENTIONALLY DELETED]

h. Listing. The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB or any equivalent replacement exchange, the Nasdaq National Market ("Nasdaq"), the Nasdaq SmallCap Market ("Nasdaq SmallCap"), the New York Stock Exchange ("NYSE"), or the American Stock Exchange ("AMEX") and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority ("FINRA") and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the OTCBB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.

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i.Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company's assets, except in the event of a merger or consolidation or sale of all or substantially all of the Company's assets, where the surviving or successor entity in such transaction (i) assumes the Company's obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

j. No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

k. Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.4 of the

Note.

l. Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

m. Trading Activities. Neither the Buyer nor its affiliates has an open short position in the common stock of the Company and the Buyer agree that it shall not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.

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5. Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the "Irrevocable Transfer Agent Instructions"). In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold), will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement. Nothing in this Section shall affect in any way the Buyer's obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the Company, at the cost of the Buyer, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

6. Conditions to the Company's Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion:

a. The Buyer shall have executed this Agreement and delivered the same to the Company.

b. The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

c. The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

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d. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

7. Conditions to The Buyer's Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer's sole benefit and may be waived by the Buyer at any time in its sole discretion:

a. The Company shall have executed this Agreement and delivered the same to the Buyer.

b. The Company shall have delivered to the Buyer the duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

c. The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Buyer, shall have been delivered to and acknowledged in writing by the Company's Transfer Agent.

d. The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Company's Certificate of Incorporation, By-laws and Board of Directors' resolutions relating to the transactions contemplated hereby.

e. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

f. No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

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g. The Conversion Shares shall have been authorized for quotation on the OTCBB and trading in the Common Stock on the OTCBB shall not have been suspended by the SEC or the OTCBB.

h. The Buyer shall have received an officer's certificate described in Section 3(c) above, dated as of the Closing Date.

8. Governing Law; Miscellaneous.

a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. 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 New York or in the federal courts located in the state and county of Nassau. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

b. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

c. Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

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d. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e. Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

f. 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:

If to the Company, to:

ATTUNE RTD

3111 Tahquitz Canyon Way

Palm Springs, CA 92263

Attn: THOMAS BIANCO, Chief Financial Officer

facsimile: 760-406-1146

With a copy by fax only to (which copy shall not constitute notice):

[enter name of law firm] -- Attn: [attorney name]

[enter address line 1]

[enter city, state, zip]

facsimile: [enter fax number]

If to the Buyer:

 ASHER ENTERPRISES, INC.

1 Linden PL, Suite 207

Great Neck, NY. 11021

Attn: Curt Kramer, President

facsimile: 516-498-9894

With a copy by fax only to (which copy shall not constitute notice):

Naidich Wurman Birnbaum & Maday LLP

80 Cuttermill Road, Suite 410

Great Neck, NY 11021

facsimile: 516-466-3555

Each party shall provide notice to the other party of any change in address.

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g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its "affiliates," as that term is defined under the 1934 Act, without the consent of the Company.

h. Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

i. Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

j. Publicity. The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC, OTCBB or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC, OTCBB (or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).

k. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

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l. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

m. Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

ATTUNE RTD
By:
	THOMAS BIANCO for the company
	Chief Financial Officer

ASHER ENTERPRISES, INC.
By:
Name:	Curt Kramer
Title:	President
1 Linden Pl., Suite 207
Great Neck, NY. 11021
AGGREGATE SUBSCRIPTION AMOUNT:
Aggregate Principal Amount of Note:		$50,000.00
Aggregate Purchase Price:		$50,000.00
3193(4) 2-21-13
tbianco@attunertd.com
sdavis(2),attunertd.com

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EX-10.6

LETTER OF ENGAGEMENT

February 26, 2013

Attune RTD (OTC:AURT) 3700B E. Tachevah Dr., #117 Palm Springs, CA 92262  

The following sets forth the agreement (this “Agreement”) for the engagement of Anubis Partners, LLC (“Anubis”) by Attune RTD (OTC:AURT) (“The Company”).

Term and Termination	This Agreement (the “Agreement”) shall be in full force and effect commencing February 26, 2013 and shall have an initial term of one month (the “Initial Term”). Either party hereto shall have the right to terminate this Agreement immediately without notice in the event of the death, bankruptcy, insolvency, or assignment for the benefit of creditors of the other party.
The Program	Anubis will work strictly as an independent contractor of The Company to structure and implement a set of marketing materials designed to help The Company establish extensive financial market and investor awareness intended to drive long-term shareholder support.
	As share price is affected by various factors unrelated to Anubis’s efforts, Anubis can give no assurance that the marketing materials will in any way create volume, buying or price appreciation for The Company’s shares.
	Current law provides that during any period in which The Company is in “registration” for a public offering of securities under the Securities Act of 1933, and during the distribution of such securities, The Company’s investor relations and marketing efforts must be severely limited. To ensure that Anubis does not violate this requirement, The Company will advise Anubis in writing whenever a registration statement is filed or a registration is pending for any of The Company’s securities. It will be the responsibility of The Company (with the advice of its securities counsel) to determine and advise Anubis as to what investor relations and financial marketing efforts are permissible and not permissible during such periods. Anubis will advise The Company in advance of any proposed investor relations or financial marketing efforts and follow the direction of The Company and its securities counsel with regard thereto.

Anubis Partners, LLC - Letter of Engagement

Page 2 of 4

Responsibilities	Anubis will review all existing asset in order build a compelling investor-focused suite of materials, a partial list of which includes:
		● A “needed assets” list
		● A review of all existing investor-focused materials
		● A vision/positioning statement
		● A press release template, including targeted corporate descriptor and “About” section
		● Investor information sheet
		● Campaign event schedule
		● Outline of additional assets to be produced
		● Press releases

Financial Communications Documents	Subject to the limitations noted herein, Anubis shall assist The Company in preparing financial communications documents, materials, and Company presentations (“Financial Communications Documents”), including press releases, online communications, and The Company’s website. The Company will assume full responsibility for the accuracy and completeness of all Financial Communications Documents and for their compliance with applicable laws, rules and regulations. Anubis shall have no obligation or duty to verify the accuracy or completeness of the Financial Communications Documents or their compliance with applicable law. Anubis shall have the right to refuse to release or publish or participate in the release or publication of any Financial Communications Documents that have not been approved in writing by The Company or that Anubis reasonably believes contains a misstatement of material fact, omits to state any material fact or otherwise does not fully comply with applicable law.
	Anubis is not registered with the Securities and Exchange Commission as a broker or dealer and, therefore, will not make any offers or sales of securities or take any other actions, which may require registration as a broker or dealer.
Service Fee	During the Initial Term, The Company agrees to pay Anubis a service fee of five thousand US dollars [$5,000.00]. This amount due and payable upon signing this Agreement.
	The Company acknowledges that Anubis will not commence work on the Company’s Program until the initial payment is received in full.

Anubis Partners, LLC - Letter of Engagement

Page 3 of 4

Equity Compensation	In addition to the Service Fee, as a material inducement to Anubis to execute this Agreement, The Company shall immediately issue to Anubis three hundred thousand (300,000) shares of The Company’s common stock (the “Sign-On Shares”).
	The Company agrees that the Sign-On Shares shall be deemed to be a fully earned and non-refundable according to their issuance date. Consequently, the Sign-On Shares shall be deemed to be fully paid, earned, and non-assessable and thus not a payment for future services. If The Company decides to terminate this Agreement for any reason whatsoever, it is agreed and understood that Anubis will not be requested or demanded by The Company to return any of earned Compensation.
Indemnification	Because Anubis must at all times rely upon the accuracy and completeness of the information supplied to it by The Company, The Company unconditionally, absolutely and irrevocably agrees to and shall indemnify and hold harmless Anubis and its past, present and future directors, officers, affiliates, counsel, shareholders, employees, agents, attorneys, representatives, contractors, successors and assigns (Anubis and such persons are collectively referred to as the “Indemnified Persons”) from and against any and all losses, claims, costs, expenses, liabilities and damages (or actions in respect thereof) arising out of or related to this Agreement, the performance of services pursuant to the Agreement, and any actions taken or omitted to be taken by an Indemnified Party in connection with this Agreement (“Indemnified Claim”).
	Without limiting the generality of the foregoing, such indemnification shall cover losses, claims, costs, expenses, liabilities and damages imposed on or incurred by the Indemnified Persons, directly or indirectly, relating to, resulting from, or arising out of any actual or alleged misstatement of fact or omission of fact, or any actual or alleged inaccuracy in any information provided or approved by The Company in connection with the engagement, including any actual or alleged misstatement, omission or inaccuracy in any filing with the Securities and Exchange Commission, press release, website, marketing material or other document, or oral presentation or webcast, whether or not the Indemnified Persons relied thereon or had knowledge thereof. In addition, The Company agrees to reimburse the Indemnified Persons for legal or other expenses reasonably incurred by them in respect of each Indemnified Claim at the time such expenses are incurred. Notwithstanding the foregoing, The Company shall not be obligated under the foregoing for any loss, claim, liability or damage that is finally determined by a court with proper jurisdiction to have resulted primarily from the willful misconduct or bad faith of the Indemnified Person.
Governing Law; Exclusive Jurisdiction	This Agreement and the rights of the parties hereunder, shall be governed by and construed in accordance with the laws of the State of Texas, including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws. The parties agree that the Courts of the County of Dallas, State of Texas shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

Anubis Partners, LLC - Letter of Engagement

Page 4 of 4

Attorneys’ Fees In the event any party hereto shall commence legal proceedings against the other to enforce the terms hereof, or to declare rights hereunder, as the result of a breach of any covenant or condition of this Agreement, the prevailing party in any such proceeding shall be entitled to recover from the losing party its costs of suit, including reasonable attorneys’ fees, as may be fixed by the court.

Attune RTD		Anubis Partners, LLC
By	For The Company	By	/s/ Jacob D. Cohen
Name	Shawn Davis		Jacob D. Cohen
Title	C.E.O		Managing Partner

Anubis Partners, LLC - Letter of Engagement

EX-10.7

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of April 18, 2013, by and between ATTUNE RTD, a Nevada corporation, with headquarters located at 3111 Tahquitz Canyon Way, Palm Springs, CA 92263 (the “Company”), and ASHER ENTERPRISES, INC., a Delaware corporation, with its address at 1 Linden Place, Suite 207, Great Neck, NY 11021 (the “Buyer”).

WHEREAS:

A. The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);

B. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement an 8% convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $22,500.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, $0.00004897 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.

C. The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately below its name on the signature pages hereto; and

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

1. Purchase and Sale of Note.

a. Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

b. Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

c. Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about April 22, 2013, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

2. Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:

a. Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are issuable (i) on account of interest on the Note, (ii) as a result of the events described in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f) below) pursuant to this Agreement, such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

b. Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

c. Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

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d. Information. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company’s representations and warranties made herein.

e. Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

f. Transfer or Re-sale. The Buyer understands that (i) the sale or re sale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

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g. Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

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h. Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

i. Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto.

3. Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

a. Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

b. Authorization: Enforcement, (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

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c. Capitalization. As of the date hereof, the authorized capital stock of the Company consists of: (i) 20,000,000,000 shares of Class A Common Stock, $0.00004897 par value per share, of which approximately 34,450,349 shares are issued and outstanding; and (ii) 1,000,000 shares of Class B Participating Cumulative Preferred Super Voting Stock, $0.0166 par value per share, of which 1,000,000 shares are issued and outstanding; no shares are reserved for issuance pursuant to the Company’s stock option plans, 4,000,000 shares are reserved for issuance pursuant to securities (other than 900,000 shares in warrants and the Note and four (4) prior convertible promissory notes in favor of the Buyer: (a) a prior convertible promissory note in favor of the Buyer dated September 28, 2011 in the amount of $42,500.00, the principal of which is now reduced to $39,750.00, for which 1,831,837 shares of Common Stock are presently reserved; (b) prior convertible promissory note in favor of the Buyer dated December 7, 2011 in the amount of $42,500.00 for which 5,500,000 shares of Common Stock are presently reserved and (c) prior convertible promissory note in favor of the Buyer dated December 3, 2012 in the amount of $3,000.00 for which 700,000 shares of Common Stock are presently reserved and (d) prior convertible promissory note in favor of the Buyer dated February 26, 2013 in the amount of $50,000.00 for which 5,068,163 shares of Common Stock are presently reserved) exercisable for, or convertible into or exchangeable for shares of Common Stock and 7,400,000 shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s Bylaws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

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d. Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

e. Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

f. No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”) and does not reasonably anticipate that the Common Stock will be delisted by the OTCBB in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

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g. SEC Documents; Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”). Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to December 31, 2012, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act.

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h. Absence of Certain Changes. Since December 31, 2012, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

i. Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

j. Patents. Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); there is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.

k. No Materially Adverse Contracts. Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.

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l. Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s tax returns is presently being audited by any taxing authority.

m. Certain Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties and other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

n. Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).

o. Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

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p. 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 in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

q. No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

r. Permits: Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Since December 31, 2012, neither the Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

s. Environmental Matters.

(i) There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

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(ii) Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s or any of its Subsidiaries’ business.

(iii) There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with applicable law.

t. Title to Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(t) or such as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.

u. Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to directors’ and officers’ liability coverage, errors and omissions coverage, and commercial general liability coverage.

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v. Internal Accounting Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

w. Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

x. Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.

y. No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”). The Company is not controlled by an Investment Company.

z. Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the Note.

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4. COVENANTS.

a. Best Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.

b. Form D: Blue Sky Laws. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the Closing Date.

c. Use of Proceeds. The Company shall use the proceeds for general working capital purposes.

d. Right of First Refusal. Unless it shall have first delivered to the Buyer, at least seventy two (72) hours prior to the closing of such Future Offering (as defined herein), written notice describing the proposed Future Offering, including the terms and conditions thereof and proposed definitive documentation to be entered into in connection therewith, and providing the Buyer an option during the seventy two (72) hour period following delivery of such notice to purchase the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence and the preceding sentence are collectively referred to as the “Right of First Refusal”) (and subject to the exceptions described below), the Company will not conduct any equity financing (including debt with an equity component) (“Future Offerings”) during the period beginning on the Closing Date and ending twelve (12) months following the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the seventy two (72) hour period following delivery of such new notice to purchase its pro rata share of the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence shall apply to successive amendments to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall not apply to any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule 415 under the 1933 Act) or (ii) issuances of securities as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company. The Right of First Refusal also shall not apply to the issuance of securities upon exercise or conversion of the Company’s options, warrants or other convertible securities outstanding as of the date hereof or to the grant of additional options or warrants, or the issuance of additional securities, under any Company stock option or restricted stock plan approved by the shareholders of the Company. The Right of First Refusal shall apply only to like transaction (i.e convertible debentures) that are in excess of $150,00.00.

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e. Expenses. At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer. The Company’s obligation with respect to this transaction is to reimburse Buyer’ expenses shall be $2,500.

f. Financial Information. Upon written request the Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or other information the Company makes available or gives to such shareholders.

g. [INTENTIONALLY DELETED]

h. Listing. The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the American Stock Exchange (“AMEX”) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the OTCBB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.

14

i. Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

j. No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

k. Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.4 of the Note.

1. Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

m. Trading Activities. Neither the Buyer nor its affiliates has an open short position in the common stock of the Company and the Buyer agree that it shall not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.

15

5. Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold), will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement. Nothing in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the Company, at the cost of the Buyer, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

16

6. Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

a. The Buyer shall have executed this Agreement and delivered the same to the Company.

b. The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

c. The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

d. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

7. Conditions to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

a. The Company shall have executed this Agreement and delivered the same to the Buyer.

b. The Company shall have delivered to the Buyer the duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

c. The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.

17

d. The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions relating to the transactions contemplated hereby.

e. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

f. No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

g. The Conversion Shares shall have been authorized for quotation on the OTCBB and trading in the Common Stock on the OTCBB shall not have been suspended by the SEC or the OTCBB.

h. The Buyer shall have received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.

8. Governing Law: Miscellaneous.

a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. 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 New York or in the federal courts located in the state and county of Nassau. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

18

b. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

c. Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

d. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e. Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

f. 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:

19

If to the Company, to:

ATTUNE RTD

3111 Tahquitz Canyon Way

Palm Springs, CA 92263

Attn: THOMAS BIANCO, Chief Financial Officer

facsimile: [enter fax number]

With a copy by fax only to (which copy shall not constitute notice):

[enter name of law firm]

Attn: [attorney name]

[enter address line 1]

[enter city, state, zip]

facsimile: [enter fax number]

If to the Buyer:

ASHER ENTERPRISES, INC.

1 Linden PL, Suite 207

Great Neck, NY. 11021

Attn: Curt Kramer, President

facsimile: 516-498-9894

With a copy by fax only to (which copy shall not constitute notice):

Naidich Wurman Birnbaum & Maday LLP

80 Cuttermill Road, Suite 410

Great Neck, NY 11021

facsimile: 516-466-3555

Each party shall provide notice to the other party of any change in address.

g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

20

h. Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

i. Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

j. Publicity. The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC, OTCBB or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC, OTCBB (or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).

k. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

1. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

m. Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

21

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

ATTUNE RTD
By:	/S/ THOMAS BIANCO
	THOMAS BIANCO
	Chief Financial Officer

ASHER ENTERPRISES, INC.
By:
Name:	Curt Kramer
Title:	President
1 Linden PL, Suite 207
Great Neck, NY. 11021
AGGREGATE SUBSCRIPTION AMOUNT:
Aggregate Principal Amount of Note:		$22,500.00
Aggregate Purchase Price:		$22,500.00
3193(4) 2-21-13
tbianco@attunertd.com
sdavis @attunertd. com
mgelmon@telusplanetnet

22

EX-10.8

 

6/7/2013

Unsecured Promissory Note Agreement

FOR VALUE RECEIVED, ATTUNE RTD, a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of Tim Smith, a natural person, or registered assigns (the “Holder”) the sum of $10,000.00 on October 7, 2013 (the “Maturity Date”).

The Following Terms Shall Apply:

The “Borrower” and or “Holder” have the right, but not the obligation to convert the “Note” into shares of restricted common stock fixed at $0.02, the closing price as of the date of this “Note” at any time before midnight on or before the “Maturity Date”.

Furthermore, in lieu of cash repayment, the “Borrower” and “Holder” have agreed to convert the “Unsecured Promissory Note” dated 7/23/2012, with a face value of $10,000 earning no interest, into 500,000 shares of restricted common stock at $0.02 per share, the closing price as of the date of this note, on or before the “Maturity Date”.

This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. 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.

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

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this Thursday, June 7, 2013

	DATE
Thomas S. Bianco, C.F.O (For the Company)
	DATE	6.07.2013
Tim Smith

 

EX-10.9

 

Principal Amount: $55,000 Issue Date: June 21, 2013

SECURED PROMISSORY NOTE

FOR VALUE RECEIVED, ATTUNE RTD, a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of Mike Mines, a natural person, or registered assigns (the “Holder”) the sum of $55,000 together with any interest as set forth herein, on June 23, 2014 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or by prepayment or otherwise. The principal amount which shall accrue interest of $6,600, due at maturity with principal of $55,000, totaling $61,600 due on the date of maturity. All payments by Borrower to Holder shall be made from proceeds received in the normal course of business and in connection with the company’s Equity Line Financing (ELF) that is currently in process with Dutchess Capital, made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of Palm Springs, California arc authorized or required by law or executive order to remain closed.

The following terms shall apply to this Note:

ARTICLE I. Collateral, Warrants, Shares, First Right of Refusal, and Taxes

1.1   Collateral. This note is secured by the Borrower’s “Energy Forecasting and Management Device”, Patent #7777366 (the “Patent”), which has been issued by the USPTO, including the associated source code, drawings, and schematics (collectively, the “Collateral”). The source code is not patented.

1.2  Greenberg Traurig, LLP. A debt obligation of exactly $7,950 is owed to Greenberg Traurig. There are no other claims or encumbrances associated with the Patent. The Borrower agrees to use monies received from this Note to immediately satisfy this outstanding debt obligation owed to Greenberg Traurig, LLP. As per an email received by Adrianne L. Chernove, at 10:46 am on 5/24/2013, the Accounts Receivable Supervisor for Greenberg Traurig, LLP, “A payment of $15.9K will fully release Attune from all current and historic financial obligation to Greenberg Traurig. “

3111 Tahquitz Canyon Way

palm springs, ca 92263

cell 760.406.1146 | cell 760.333.3842

www.attunertd.com

Upon receipt of liquid funds under this Note and made available by our depositing bank, Borrower will issue Greenberg Traurig, LLP a cashier check in that exact amount to satisfy the entire amount owed, and provide Holder with a copy of the instrument and invoice or communication from Greenberg Traurig, LLP showing receipt of funds and releasing Borrower and Patent from all current and historical financial obligations or encumbrances related to the Patent.

1.3  Warrants. The Holder shall have the right, but not the obligation, to purchase shares of common stock equal to the face value of this Note, $55,000, at a fixed share price of $0.04, totaling not more than 1,375,000 shares of restricted common stock beginning on the date of inception of this Note and terminating exactly Three years later. The parties may enter into a separate Warrant Agreement that is consistent with the terms of the warrants granted and discussed herein. Notification to exercise Warrants shall be made in accordance with Article III, paragraph 3.1.

1.4  Authorized Shares. The Borrower covenants that during the period the Warrant rights exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, to provide for the issuance of Common pursuant to this Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Borrower (i) acknowledges that it will instruct its transfer agent to issue certificates for the Common Stock issuable upon exercise of the warrants, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note

(a) Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on exercise of the warrants in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

(b) Obligation of Borrower to Deliver Common Stock.. Upon receipt by the Borrower of a Notice to exercise warrants, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional.

3111 Tahquitz Canyon Way

palm springs, ca 92263

cell 760.406.1146 | cell 760.333.3842

www.attunertd.com

 

1.5  Concerning the Shares. The shares of Common Stock issuable upon exercise of Warrants may not be sold or transferred unless (i) such shares arc sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule 144”).

1.6.  First Right of Refusal-”Call Option”. Borrower agrees to provide Holder the right, but not the obligation, to enter into future loan agreements with stock warrants equivalent to the face value of future Note(s). Exercise price is to be negotiated at time of inception. Holder will have ten business days to cither accept or decline to engage in future transactions. If Holder declines to enter into future transactions, Borrower is free to engage other interested parties.

ARTICLE II. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

2.1  Failure to Pay Principal and Interest. The Borrower fails to pay the principal and interest thereon when due on this Note. In such event of default, Borrower agrees to make itself available during business hours for the purposes of facilitating transfer of those items secured by this Note. Notice of default shall be made in accordance with Article III, paragraph 3.1.

2.2  Exercise of Warrants. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder, notification of which is made in writing in accordance with Article III, paragraph 3.1, of the Warrant rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) any certificate for shares of Common Stock issued to the Holder upon exercise. Notification to exercise Warrants shall be made in accordance with Article III, paragraph 3.1.

2.3  Receiver or Trustee. The Borrower or any subsidiary of 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.

3111 Tahquitz Canyon Way

palm springs, ca 92263

cell 760.406.1146 | cell 760.333.3842

www.attunertd.com

 

2.4 Bankruptcy. Insolvency, reorganization or liquidation proceedings, or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

ARTICLE III. MISCELLANEOUS

3.1 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:

If to the Borrower, to:

ATTUNE RTD

3111 Tahquitz Canyon Way

Palm Springs, CA 92263

Attn: THOMAS BIANCO, Chief Financial Officer

760.406.1146

Email: tbianco@attunertd.com

OR

ATTUNE RTD

3111 Tahquitz Canyon Way

Palm Springs, CA 92263

Attn: SHAWN DAVIS, Chief Executive Officer

760.333.3842

Email: sdavis@attunertd.com

 3111 Tahquitz Canyon Way

palm springs, ca 92263

cell 760.406.1146 | cell 760.333.3842

www.attunertd.com

 

With a copy by fax only to (which copy shall not constitute notice): Gary L. Blum, Esq.

Law Offices of Gary L. Blum

3278 Wilshire Boulevard, Suite 603

Los Angeles, California 90010

Phone: 213.381.7450

Fax: 213.384.1035

email: gblum@gblumlaw.com

www.gblumlaw.com

If to the Holder:

Mike Mines

With a copy by fax only to (which copy shall not constitute notice): Law Firm?

3111 Tahquitz Canyon Way

palm springs, ca 92263

cell 760.406,1146 | cell 760.333.3842

www.attunertd.com

 

3.2 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. 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.

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

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

3.5 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of California or in the federal courts located in the state and county of Riverside. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

3.6 Notice of Corporate Events. The Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it exercises the warrant option of this Note into Common Stock, at which point Holder will then be entitled to the same rights afforded any other person owning shares in the company’s common stock.

3111 Tahquitz Canyon Way

palm springs, ca 92263

cell 760.406.1146 | cell 760.333.3842

www.attunertd.com

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this Thursday, May 23, 2013

	DATE
Shawn Davis, C.E.O, For Attune RTD
/s/ Mike Mines	DATE	6/24/13
Mike Mines

3111 Tahquitz Canyon Way

palm springs, ca 92263

cell 760.406.1146 | cell 760.333.3842

www.attunertd.com

EX-10.10

STOCK PURCHASE WARRANT

To Purchase Class A Common Stock of

ATTUNE RTD.

A Nevada Corporation

Date of Grant	June 21, 2013
Name of Holder	Mike Mines
Number of Warrants	1,375,000 Warrants exercisable into 1,375,000 Class A Common Shares
Exercise Price	$0.04 per Class A Common Share
Term:	Anytime prior to Midnight PST on June 23, 2016

THIS CERTIFIES THAT, for value received, the Holder, named above, or registered assigns, is entitled to purchase from ATTUNE, (herein called the “Company”), a Nevada corporation for the Term, stated above, beginning upon the Issue Date and ending on June 23,2016 stated above, that number of Series A Common Shares (the “Shares”), stated above, of the Company’s Common Stock, as adjusted as provided in Section 5 below, at the Exercise Price, stated above. This Stock Purchase Warrant is subject to the following provisions, terms and conditions:

1. Exercise of Warrant. The rights represented by this Warrant may be exercised by the Holder, in whole or in part (but not as fractional shares of Common Stock), by the surrender of this Warrant (properly endorsed if required) and the attached form of exercise at the Company’s registered office, and upon payment to the Company by certified or bank check of the Exercise Price for the Shares. The Shares are deemed to be issued to the Holder as the record owner as of the close of business on the date on which this Warrant shall have been surrendered and payment made for the Shares. Certificates for the Shares so purchased shall be delivered to the Holder within a reasonable time, not exceeding fifteen (15) days, after the rights represented by this Warrant shall have been so exercised. Unless this Warrant has expired, a new Warrant representing the number of Shares, if any, with respect to which this Warrant shall not then have been exercised, shall be delivered to the Holder at the same time.

2. Transfer of Warrants. During the Term of this Warrant, this Warrant may, subject to any applicable securities laws restrictions, be transferred or exchanged with respect to all Warrants, or any number of Warrants, less than all, represented by this Warrant Certificate. If this Warrant is transferred or exchanged in part, the Company shall, upon surrender for transfer, or exchange of this Warrant Certificate, properly endorse, and, at theCompany’s expense, issue and deliver to the purchaser of said Warrant, a Certificate representing the number of Warrants transferred or exchanged, and a Certificate to the Holder, representing the number of Warrants retained.

3. Certain Covenants of the Company. The Company covenants and agrees as follows:

a. All shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized and issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof.

b. During the Term of this Warrant, the Company will at all times have authorized, and reserved free of preemptive or other rights for the exclusive purpose of issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant.

4. Adjustment of Exercise Price and Number of Shares. The above provisions are, however, subject to the following:

a. The Exercise Price shall be subject to adjustment from time to time as hereinafter provided. Upon each adjustment of the Exercise Price, the Holder shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the Exercise Price ‘in effect immediately prior to such adjustments by the number of shares purchasable pursuant hereto immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment.

b. In case at any time the Company shall subdivide its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced and conversely, in case the outstanding shares of Common Stock of the Company shall be combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased.

c. In case at any time:

(1) the Company shall pay any dividend payable in stock upon its Common Stock or make any distribution (other than regular cash dividends) to the holders of its Common Stock; or

(2) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any rights; or

(3) there shall be any capital reorganization, or reclassification of the capital stock of the Company, or consolidation or merger of the Company with, or sale of all or substantial all of its assets to, another corporation; or

(4) there shall be a change of control of 50% or more of the shares outstanding to a third party that is not already a shareholder of the company; or

(5) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company;

Then, in any one or more of said cases, the Company shall give written notice, by first class mail, postage prepaid, addressed to title Holder at the address of the Holder as shown on the books of the Company, of the date on which (a) the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights, or (b) such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up shall take place, as the case may be. Such notice shall also specify the date as of which the holders of Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sales, dissolution, liquidation, or winding up, as the case may be. Such written notice shall be given at least 20 days prior to the action in question and not less that 20 days prior to the record date on which the Company’s transfer books are closed in respect thereto.

5. Term and Assignment.

a. This Warrant shall be valid and exercisable by the Holder during its Term.

b. During the Term of the Warrant, the holder may assign the rights represented by this Warrant, to the extent not previously exercised, subject to any applicable securities laws restrictions.

6. No Rights as Stockholder. This Warrant shall not entitle the Holder as such to any voting rights or other rights as a stockholder of the Company.

IN WITNESS WHEREOF, ATTUNE RTD. has caused this Warrant to be signed by a duly authorized officer as of the Date of Grant stated above.

ATTUNE RTD.

BY:

EX-10.11

Principal Amount: $55,000 Issue Date: June 21, 2013

SECURED PROMISSORY NOTE

FOR VALUE RECEIVED, ATTUNE RTD, a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of TWENTY08, LLC TWENTY08, LLC, a natural person, or registered assigns (the “Holder”) the sum of $55,000 together with any interest as set forth herein, on June 23, 2014 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or by prepayment or otherwise. The principal amount which shall accrue interest of $6,600, due at maturity with principal of $55,000, totaling $61,600 due on the date of maturity. All payments by Borrower to Holder shall be made from proceeds received in the normal course of business and in connection with the company’s Equity Line Financing (ELF) that is currently in process with Dutchess Capital, made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of Palm Springs, California are authorized or required by law or executive order to remain closed.

The following terms shall apply to this Note:

ARTICLE I. Collateral, Warrants, Shares, First Right of Refusal, and Taxes

1.1 Collateral. This note is secured by the Borrower’s “Energy Forecasting and Management Device”, Patent #7777366 (the “Patent”), which has been issued by the USPTO, including the associated source code, drawings, and schematics (collectively, the “Collateral”). The source code is not patented.

1.2 Greenberg Traurig, LLP. A debt obligation of exactly $7,950 is owed to Greenberg Traurig. There are no other claims or encumbrances associated with the Patent. The Borrower agrees to use monies received from this Note to immediately satisfy this outstanding debt obligation owed to Greenberg Traurig, LLP. As per an email received by Adrianne L. Chernove, at 10:46 am on 5/24/2013, the Accounts Receivable Supervisor for Greenberg Traurig, LLP, “A payment of $15.9K will fully release Attune from all current and historic financial obligation to Greenberg Traurig.”

 

Upon receipt of liquid funds under this Note and made available by our depositing bank, Borrower will issue Greenberg Traurig, LLP a cashier check in that exact amount to satisfy the entire amount owed, and provide Holder with a copy of the instrument and invoice or communication from Greenberg Traurig, LLP showing receipt of funds and releasing Borrower and Patent from all current and historical financial obligations or encumbrances related to the Patent.

1.3 Warrants. The Holder shall have the right, but not the obligation, to purchase shares of common stock equal to the face value of this Note, $55,000, at a fixed share price of $0.04, totaling not more than 1,375,000 shares of restricted common stock beginning on the date of inception of this Note and terminating exactly Three years later. The parties may enter into a separate Warrant Agreement that is consistent with the terms of the warrants granted and discussed herein. Notification to exercise Warrants shall be made in accordance with Article III, paragraph 3.1.

1.4 Authorized Shares. The Borrower covenants that during the period the Warrant rights exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, to provide for the issuance of Common pursuant to this Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Borrower (i) acknowledges that it will instruct its transfer agent to issue certificates for the Common Stock issuable upon exercise of the warrants, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note

(a) Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on exercise of the warrants in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

(b) Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice to exercise warrants, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional.

 

 

1.5 Concerning the Shares. The shares of Common Stock issuable upon exercise of Warrants may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule 144”).

1.6. First Right of Refusal-“Call Option”. Borrower agrees to provide Holder the right, but not the obligation, to enter into future loan agreements with stock warrants equivalent to the face value of future Note(s). Exercise price is to be negotiated at time of inception. Holder will have ten business days to either accept or decline to engage in future transactions. If Holder declines to enter into future transactions, Borrower is free to engage other interested parties.

ARTICLE II. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

2.1 Failure to Pay Principal and Interest. The Borrower fails to pay the principal and interest thereon when due on this Note. In such event of default, Borrower agrees to make itself available during business hours for the purposes of facilitating transfer of those items secured by this Note. Notice of default shall be made in accordance with Article III, paragraph 3.1.

2.2 Exercise of Warrants. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder, notification of which is made in writing in accordance with Article III, paragraph 3.1, of the Warrant rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) any certificate for shares of Common Stock issued to the Holder upon exercise. Notification to exercise Warrants shall be made in accordance with Article III, paragraph 3.1.

2.3 Receiver or Trustee. The Borrower or any subsidiary of 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.

 

 

2.4 Bankruptcy. Insolvency, reorganization or liquidation proceedings, or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

ARTICLE III. MISCELLANEOUS

3.1 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:

If to the Borrower, to:

ATTUNE RTD

3111 Tahquitz Canyon Way

Palm Springs, CA 92263

Attn: THOMAS BIANCO, Chief Financial Officer

760.406.1146

Email: tbianco@attunertd.com

OR

ATTUNE RTD

3111 Tahquitz Canyon Way

 

Palm Springs, CA 92263

Attn: SHAWN DAVIS, Chief Executive Officer

760.333.3842

Email: sdavis@attunertd.com

With a copy by fax only to (which copy shall not constitute notice):

Gary L. Blum, Esq.

Law Offices of Gary L. Blum

3278 Wilshire Boulevard, Suite 603

Los Angeles, California 90010

Phone: 213.381.7450

Fax: 213.384.1035

email: gblum@gblumlaw.com

www.gblumlaw.com

If to the Holder:

TWENTY08, LLC

With a copy by fax only to (which copy shall not constitute notice):

Law Firm?

 

 

3.2 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. 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.

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

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

3.5 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of California or in the federal courts located in the state and county of Riverside. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

3.6 Notice of Corporate Events. The Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it exercises the warrant option of this Note into Common Stock, at which point Holder will then be entitled to the same rights afforded any other person owning shares in the company’s common stock.

 

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this Thursday, June 21, 2013

	DATE
Shawn Davis, C.E.O, For Attune RTD

	DATE
TWENTY08, LLC

 

EX-10.12

STOCK PURCHASE WARRANT

To Purchase Class A Common Stock of

ATTUNE RTD.

A Nevada Corporation

Date of Grant	June 21, 2013
Name of Holder	TWENTY08, LLC
Number of Warrant	1,375,000 Warrants exercisable into 1,375,000 Class A Common Shares
Exercise Price	$0.04 per Class A Common Share
Term:	Any time prior to Midnight PST on June 23, 2016

THIS CERTIFIES THAT, for value received, the Holder, named above, or registered assigns, is entitled to purchase from ATTUNE, (herein called the “Company”), a Nevada corporation for the Term, stated above, beginning upon the Issue Date and ending on June 23,2016 stated above, that number of Series A Common Shares (the “Shares”), stated above, of the Company’s Common Stock, as adjusted as provided in Section 5 below, at the Exercise Price, stated above. This Stock Purchase Warrant is subject to the following provisions, terms and conditions:

1. Exercise of Warrant. The rights represented by this Warrant may be exercised by the Holder, in whole or in part (but not as fractional shares of Common Stock), by the surrender of this Warrant (properly endorsed if required) and the attached form of exercise at the Company’s registered office, and upon payment to the Company by certified or bank check of the Exercise Price for the Shares. The Shares are deemed to be issued to the Holder as the record owner as of the close of business on the date on which this Warrant shall have been surrendered and payment made for the Shares. Certificates for the Shares so purchased shall be delivered to the Holder within a reasonable time, not exceeding fifteen (15) days, after the rights represented by this Warrant shall have been so exercised. Unless this Warrant has expired, a new Warrant representing the number of Shares, if any, with respect to which this Warrant shall not then have been exercised, shall be delivered to the Holder at the same time.

2. Transfer of Warrants. During the Term of this Warrant, this Warrant may, subject to any applicable securities laws restrictions, be transferred or exchanged with respect to all Warrants, or any number of Warrants, less than all, represented by this Warrant Certificate. If this Warrant is transferred or exchanged in part, the Company shall, upon surrender for transfer, or exchange of this Warrant Certificate, properly endorse, and, at the Company’s expense, issue and deliver to the purchaser of said Warrant, a Certificate representing the number of Warrants transferred or exchanged, and a Certificate to the Holder, representing the number of Warrants retained.

3. Certain Covenants of the Company. The Company covenants and agrees as follows:

a. All shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized and issued, fully paid and non-assessable and free from all taxes. liens and charges with respect to the issue thereof.

b. During the Term of this Warrant, the Company will at all times have authorized, and reserved free of preemptive or other rights for the exclusive purpose of issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant.

4. Adjustment of Exercise Price and Number of Shares. The above provisions are, however, subject to the following:

a. The Exercise Price shall be subject to adjustment from time to time as hereinafter provided. Upon each adjustment of the Exercise Price, the Holder shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the Exercise Price ‘in effect immediately prior to such adjustments by the number of shares purchasable pursuant hereto immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment.

b. In case at any time the Company shall subdivide its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced and conversely, in case the outstanding shares of Common Stock of the Company shall be combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased.

c. In case at any time:

(1) the Company shall pay any dividend payable in stock upon its Common Stock or make any distribution (other than regular cash dividends) to the holders of its Common Stock; or

(2) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any rights; or

(3) there shall be any capital reorganization, or reclassification of the capital stock of the Company, or consolidation or merger of the Company with, or sale of all or substantial all of its assets to, another corporation; or

(4) there shall be a change of control of 50% or more of the shares outstanding to a third party that is not already a shareholder of the company; or

(5) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company;

Then, in any one or more of said cases, the Company shall give written notice, by first class mail, postage prepaid, addressed to title Holder at the address of the Holder as shown on the books of the Company, of the date on which (a) the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights, or (b) such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up shall take place, as the case may be. Such notice shall also specify the date as of which the holders of Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sales, dissolution, liquidation, or winding up, as the case may be. Such written notice shall be given at least 20 days prior to the action in question and not less that 20 days prior to the record date on which the Company’s transfer books are closed in respect thereto.

5. Term and Assignment.

a. This Warrant shall be valid and exercisable by the Holder during its Term.

b. During the Term of the Warrant, the holder may assign the rights represented by this Warrant, to the extent not previously exercised, subject to any applicable securities laws restrictions.

6. No Rights as Stockholder. This Warrant shall not entitle the Holder as such to any voting rights or other rights as a stockholder of the Company.

IN WITNESS WHEREOF, ATTUNE RTD. has caused this Warrant to be signed by a duly authorized officer as of the Date of Grant stated above.

ATTUNE RTD.
BY:		June 29, 2013
	By;  Thomas Bianco, C.F.O for Attune RTD

EX-10.13

INVESTMENT AGREEMENT

INVESTMENT AGREEMENT (this “AGREEMENT”), dated as of June 26, 2013 by and between ATTUNE RTD, INC. a Nevada corporation (the “Company”), and Dutchess Opportunity Fund, II, LP, a Delaware Limited Partnership (the “Investor”).

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Investor shall invest up to five million dollars ($5,000,000) to purchase the Company’s Common Stock with $.00004897 par value per share (the “Common Stock”);

WHEREAS, such investments will be made in reliance upon the provisions of Section 4(2) under the Securities Act of 1933, as amended (the “1933 Act”), Rule 506 of Regulation D, and the rules and regulations promulgated thereunder, and/or upon such other exemption from the registration requirements of the 1933 Act as may be available with respect to any or all of the investments in Common Stock to be made hereunder; and

WHEREAS, contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement substantially in the form attached hereto (the “Registration Rights Agreement”) pursuant to which the Company has agreed to provide certain registration rights under the 1933 Act, and the rules and regulations promulgated thereunder, and applicable state securities laws.

NOW THEREFORE, in consideration of the foregoing recitals, which shall be considered an integral part of this Agreement, the covenants and agreements set forth hereafter, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Investor hereby agree as follows:

SECTION 1. DEFINITIONS.

As used in this Agreement, the following terms shall have the following meanings specified or indicated below, and such meanings shall be equally applicable to the singular and plural forms of such defined terms.

“1933 Act” shall have the meaning set forth in the recitals of this Agreement.

“1934 Act” shall mean the Securities Exchange Act of 1934, as it may be amended.

“AAA” shall have the meaning specified in Section 12.

“Affiliate” shall have the meaning specified in Section 5(H).

“Agreement” shall mean this Investment Agreement.

“Articles of Incorporation” shall have the meaning specified in Section 4(C).

“By-laws” shall have the meaning specified in Section 4(C).

“Closing” shall have the meaning specified in Section 2(F).

“Closing Date” shall have the meaning specified in Section 2(F).

AURT.INVESTMENT AGREEMENT.JUNE.2013

“Common Stock” shall have the meaning set forth in the recitals of this Agreement.

“Company” shall have the meaning set forth in the preamble of this Agreement.

“Control” or “Controls” shall have the meaning specified in Section 5(H).

“DTC” shall have the meaning specified in Section 2(F).

“DWAC” shall have the meaning specified in Section 2(F).

“Effective Date” shall mean the date the SEC declares effective under the 1933 Act the Registration Statement covering the Securities.

“Equity Line Transaction Documents” shall mean this Agreement and the Registration Rights Agreement.

“FAST” shall have the meaning specified in Section 2(F).

“Indemnities” shall have the meaning specified in Section 11.

“Indemnified Liabilities” shall have the meaning specified in Section 11.

“Indemnitor” shall have the meaning specified in Section 11.

“Investor” shall have the meaning indicated in the preamble of this Agreement.

“Material Adverse Effect” shall have the meaning specified in Section 4(A).

“Maximum Common Stock Issuance” shall have the meaning specified in Section 2(G).

“Minimum Acceptable Price” with respect to any Put Notice Date shall be the price defined by the Company in the applicable Put Notice.

“Open Market Adjustment Amount” shall have the meaning specified in Section 2(H).

“Open Market Share Purchase” shall have the meaning specified in Section 2(H).

“Open Period” shall mean the period beginning on and including the Trading Day immediately following the Effective Date and ending on the earlier to occur of (i) the date which is thirty-six (36) months from the Effective Date; or (ii) termination of the Agreement in accordance with Section 9, below.

“Pricing Period” shall mean the five (5) consecutive Trading Days beginning on the Put Notice Date and ending on and including the date that is four (4) Trading Days after such Put Notice Date.

“Principal Market” shall mean the Nasdaq Capital Market, the NYSE Amex, the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Bulletin Board, whichever is the principal market on which the Common Stock is listed.

“Prospectus” shall mean the prospectus, preliminary prospectus and supplemental prospectus used in connection with the Registration Statement.

AURT.INVESTMENT AGREEMENT.JUNE.2013

2

“Purchase Amount” shall mean the total amount being paid by the Investor on a particular Closing Date to purchase the Securities.

“Purchase Price” shall mean ninety-five percent (95%) of the lowest daily VWAP (as defined herein) of the Common Stock during the Pricing Period.

“Put” shall have the meaning set forth in Section 2(B) hereof.

“Put Amount” shall have the meaning set forth in Section 2(B) hereof.

“Put Notice” shall mean a written notice in the form attached hereto as Exhibit C, sent to the Investor by the Company stating the Put Amount in U.S. dollars the Company intends to sell to the Investor pursuant to the terms of the Agreement and stating the current number of Shares issued and outstanding on such date.

“Put Notice Date” shall mean the Trading Day, as set forth below, immediately following the day on which the Investor receives a Put Notice, however a Put Notice shall be deemed delivered on (a) the Trading Day it is received by facsimile or email by the Investor if such notice is received prior to noon Eastern Time, or (b) the immediately succeeding Trading Day if it is received by facsimile or otherwise after noon Eastern Time on a Trading Day. No Put Notice may be deemed delivered on a day that is not a Trading Day.

“Put Restriction” shall mean the days during the Pricing Period. During this time, the Company shall not be entitled to deliver another Put Notice.

“Put Shares Due” shall have the meaning specified in Section 2(H).

“Registration Rights Agreement” shall have the meaning set forth in the recitals of this Agreement.

“Registration Statement” means the registration statement of the Company filed under the 1933 Act covering the resale by the Investor of the Common Stock issuable hereunder.

“Related Party” shall have the meaning specified in Section 5(H).

“Resolutions” shall have the meaning specified in Section 8(E).

“SEC” shall mean the U.S. Securities & Exchange Commission.

“SEC Documents” shall have the meaning specified in Section 4(G).

“Securities” shall mean the shares of Common Stock issued pursuant to the terms of the Agreement.

“Shares” shall mean the shares of the Company’s Common Stock.

“Subsequent Purchasers” shall have the meaning specified in Section 2(I).

“Subsidiaries” shall have the meaning specified in Section 4(A).

“Trading Day” shall mean any day on which the Principal Market for the Common Stock is open for trading, from the hours of 9:30 am until 4:00 pm Boston Time.

“VWAP” shall mean the volume weighted average price during a Trading Day.

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SECTION 2. PURCHASE AND SALE OF COMMON STOCK.

(A) PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and conditions set forth herein, the Company may issue and sell to the Investor, and the Investor shall purchase from the Company, up to that number of Shares having an aggregate Purchase Price of five million dollars ($5,000,000).

(B) DELIVERY OF PUT NOTICES. Subject to the terms and conditions of the Equity Line Transaction Documents, and from time to time during the Open Period, the Company may, in its sole discretion, deliver a Put Notice to the Investor which states the dollar amount (designated in U.S. Dollars) (the “Put Amount”) of Shares which the Company intends to sell to the Investor on a Closing Date (the “Put”). The Put Amount shall be equal to up to either 1) two hundred percent (200%) of the average daily volume (U.S. market only) of the Common Stock for the three (3) Trading Days prior to the applicable Put Notice Date, multiplied by the average of the three (3) daily closing prices immediately preceding the Put Date or 2) one hundred thousand dollars ($100,000). During the Open Period, the Company shall not be entitled to submit a Put Notice until the Pricing Period for the prior Put has been completed. The Common Stock identified in the Put Notice shall be purchased for a price equal to the Purchase Price.

(C) COMPANY’S RIGHT TO SUSPEND. On each Put Notice submitted to the Investor by the Company, the Company shall have the option to specify a Suspension Price for that Put. In the event the Common Stock falls below the Suspension Price, the Put shall be temporarily suspended. The Put shall resume at such time as the Common Stock is above the Suspension Price, provided the dates for the Pricing Period for that particular Put are still valid. In the event the Pricing Period has been complete, any shares above the Suspension Price due to the Investor shall be sold to the Investor by the Company at the Suspension Price under the terms of this Agreement. The Suspension Price for a Put may not be changed by the Company once submitted to the Investor.

(D) CONDITIONS TO INVESTOR'S OBLIGATION TO PURCHASE SHARES. Notwithstanding anything to the contrary in this Agreement, the Company shall not be entitled to deliver a Put Notice and the Investor shall not be obligated to purchase any Shares at a Closing unless each of the following conditions are satisfied:

(1) a Registration Statement shall have been declared effective and shall remain effective and available for the resale of all the Registrable Securities (as defined in the Registration Rights Agreement) at all times until the Closing with respect to the subject Put Notice;

(2) at all times during the period beginning on the related Put Notice Date and ending on and including the related Closing Date, the Common Stock shall have been listed on the Principal Market and shall not have been suspended from trading thereon for a period of two (2) consecutive Trading Days during the Open Period and the Company shall not have been notified of any pending or threatened proceeding or other action to suspend the trading of the Common Stock;

(3) the Company has complied with its obligations and is otherwise not in breach of or in default under this Agreement, the Registration Rights Agreement or any other agreement executed in connection herewith which has not been cured prior to delivery of the Put Notice;

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(4) no injunction shall have been issued and remain in force, or action commenced by a governmental authority which has not been stayed or abandoned, prohibiting the purchase or the issuance of the Securities; and

(5) the issuance of the Securities pursuant to this Agreement will not violate any shareholder approval requirements of the Principal Market.

If any of the events described in clauses (1) through (5) above occurs during a Pricing Period, then the Investor shall have no obligation to purchase the Common Stock subject to the applicable Put Notice.

(E) INTENTIONALLY OMITTED.

(F) MECHANICS OF PURCHASE OF SHARES BY INVESTOR. The closing of the purchase by the Investor of Shares (a “Closing”) shall occur on the date which is no later than five (5) Trading Days following the applicable Put Notice Date (each a “Closing Date”). On each Closing Date, (I) the Company shall deliver to the Investor pursuant to this Agreement, certificates representing the Shares to be issued to the Investor on such date and registered in the name of the Investor; and (II) the Investor shall deliver to the Company the Purchase Price to be paid for such Shares, based on the Put Amount set forth in Section 2(B). In lieu of delivering physical certificates representing the Securities and provided that the Company's transfer agent then is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Investor, the Company shall use all commercially reasonable efforts to cause its transfer agent to electronically transmit the Securities by crediting the account of the Investor's prime broker (as specified by the Investor within a reasonable period in advance of the Investor's notice) with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.

The Company understands that a delay in the issuance of Securities beyond the Closing Date could result in economic damage to the Investor. After the Effective Date, as compensation to the Investor for such loss, the Company agrees to make payments to the Investor for late issuance of Securities (delivery of Securities after the applicable Closing Date) in accordance with the following schedule (where “No. of Days Late” is defined as the number of trading days beyond the Closing Date, with the Amounts being cumulative.):

LATE PAYMENT FOR EACH NO. OF DAYS LATE
1	$100
2	$200
3	$300
4	$400
5	$500
6	$600
7	$700
8	$800
9	$900
10	$1000
Over 10	$1,000 + $200 for each Business Day late beyond 10 days

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The Company shall make any payments incurred under this Section in immediately available funds upon demand by the Investor. Nothing herein shall limit the Investor's right to pursue actual damages for the Company's failure to issue and deliver the Securities to the Investor, except that such late payments shall offset any such actual damages incurred by the Investor, and any Open Market Adjustment Amount, as set forth below.

(G) OVERALL LIMIT ON COMMON STOCK ISSUABLE. Notwithstanding anything contained herein to the contrary, if during the Open Period the Company becomes listed on an exchange that limits the number of shares of Common Stock that may be issued without shareholder approval, then the number of Shares issuable by the Company and purchasable by the Investor, shall not exceed that number of the shares of Common Stock that may be issuable without shareholder approval (the “Maximum Common Stock Issuance”). If such issuance of shares of Common Stock could cause a delisting on the Principal Market, then the Maximum Common Stock Issuance shall first be approved by the Company's shareholders in accordance with applicable law and the By-laws and Articles of Incorporation of the Company, as amended. The parties understand and agree that the Company's failure to seek or obtain such shareholder approval shall in no way adversely affect the validity and due authorization of the issuance and sale of Securities or the Investor's obligation in accordance with the terms and conditions hereof to purchase a number of Shares in the aggregate up to the Maximum Common Stock Issuance limitation, and that such approval pertains only to the applicability of the Maximum Common Stock Issuance limitation provided in this Section 2(H).

(H) OPEN MARKET ADJUSTMENT. If, by the third (3rd) business day after a Closing Date, the Company fails to deliver any portion of the Securities subject to a Put Notice to the Investor (the “Put Shares Due”) and the Investor purchases, in an open market transaction or otherwise, shares of Common Stock necessary to make delivery by the Investor of shares in respect of sales to subsequent purchasers, pursuant to transactions entered into before the Closing Date (“Subsequent Purchasers”), which such shares of Common Stock would have been delivered to the Investor by the Company but for the Company’s failure to so deliver (the “Open Market Share Purchase”), then the Company shall pay to the Investor, in addition to any other amounts due to Investor pursuant to the Put, and not in lieu thereof, the Open Market Adjustment Amount (as defined below). The “Open Market Adjustment Amount” is the amount equal to the excess, if any, of (x) the Investor's total purchase price (including brokerage commissions, if any) for the Open Market Share Purchase minus (y) the net proceeds (after brokerage commissions, if any) received by the Investor from the sale of the Put Shares Due to such Subsequent Purchasers. The Company shall pay the Open Market Adjustment Amount to the Investor in immediately available funds within five (5) business days of written demand by the Investor. By way of illustration and not in limitation of the foregoing, if the Investor purchases shares of Common Stock having a total purchase price (including brokerage commissions) of $11,000 to cover an Open Market Share Purchase with respect to shares of Common Stock it sold to Subsequent Purchasers for net proceeds of $10,000, the Open Market Adjustment Amount which the Company will be required to pay to the Investor will be $1,000.

(I) LIMITATION ON AMOUNT OF OWNERSHIP. Notwithstanding anything to the contrary in this Agreement, in no event shall the Investor be entitled to purchase that number of Shares, which when added to the sum of the number of shares of Common Stock beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3 of the 1934 Act), by the Investor, would exceed 4.99% of the number of shares of Common Stock outstanding on the Closing Date, as determined in accordance with Rule 13d-1(j) of the 1934 Act.

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SECTION 3. INVESTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The Investor represents and warrants to the Company, and covenants, that:

(A) SOPHISTICATED INVESTOR. The Investor has, by reason of its business and financial experience, such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type that it is capable of (1) evaluating the merits and risks of an investment in the Securities and making an informed investment decision; (2) protecting its own interest; and (3) bearing the economic risk of such investment for an indefinite period of time.

(B) AUTHORIZATION; ENFORCEMENT. The Investor has the requisite power and authority to enter into and perform this Agreement and the Registration Rights Agreement. The execution and delivery of the Equity Line Transaction Documents by the Investor and the consummation by it of the transactions contemplated hereby and thereby have been duly and validly authorized by the Investor's general partners and no further consent or authorization is required by its partners. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and is a valid and binding agreement of the Investor enforceable against the Investor in accordance with its terms, subject as to enforceability to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

(C) SECTION 9 OF THE 1934 ACT. During the term of this Agreement, the Investor will comply with the provisions of Section 9 of the 1934 Act, and the rules promulgated thereunder, with respect to transactions involving the Common Stock. The Investor agrees not to sell the Company's stock short, either directly or indirectly through its affiliates, principals or advisors, the Company's common stock during the term of this Agreement.

(D) ACCREDITED INVESTOR. Investor is an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D of the 1933 Act.

(E) NO CONFLICTS. The execution, delivery and performance of the Transaction Documents by the Investor and the consummation by the Investor of the transactions contemplated hereby and thereby will not (1) result in a violation of the partnership agreement or other organizational documents of the Investor, (2) conflict with, or constitute a material default (or an event which with notice or lapse of time or both would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, contract, indenture mortgage, indebtedness or instrument to which the Investor is a party, or to the Investor’s knowledge result in a violation of any law, rule, regulation, order, judgment or decree (including United States federal and state securities laws and regulations) applicable to the Investor or by which any property or asset of the Investor is bound or affected.

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(F) NO VIOLATIONS. Except as disclosed in Schedule 3(f), the Investor is not in violation of any term of, or in default under, the partnership agreement of other organizational documents of the Investor or any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Investor, except for conflicts, defaults, terminations, amendments, accelerations, cancellations and violations that would not, individually or in the aggregate, constitute or reasonably be expected to constitute a material adverse effect on the Investor. The business of the Investor is not being conducted, and shall not be conducted, in violation of any law, statute, ordinance, rule, order or regulation of any governmental authority or agency, regulatory or self-regulatory agency, or court, except for violations the sanctions for which either, individually or in the aggregate, would not have or reasonably be expected to have a material adverse effect on the Investor. Except as specifically contemplated by this Agreement and as required under the 1933 Act or any securities laws of any states, to the Investor’s knowledge, the Investor is not required to obtain any consent, authorization, permit or order of, or make any filing or registration (except the filing of a registration statement as outlined in the Registration Rights Agreement) with, any court, governmental authority or agency, regulatory or self-regulatory agency or other third party in order for it to execute, deliver or perform any of its obligations under, or contemplated by, the Equity Line Transaction Documents in accordance with the terms hereof or thereof except for those consents, authorizations, permits, orders or filings as have been obtained or effected on or prior to the date hereof and are in full force and effect as of the date hereof. Except as disclosed in Schedule 3(f), the Investor is unaware of any facts or circumstances which might give rise to any violation or default set forth in this Section 3(F).

(G) OPPORTUNITY TO DISCUSS. The Investor has received all materials relating to the Company's business, finance and operations which it has requested. The Investor has had an opportunity to discuss the business, management and financial affairs of the Company with the Company's management.

(H) INVESTMENT PURPOSES. The Investor is purchasing the Securities for its own account for investment purposes and not with a view towards distribution and agrees to resell or otherwise dispose of the Securities solely in accordance with the registration provisions of the 1933 Act (or pursuant to an exemption from such registration provisions).

(I) NO REGISTRATION AS A DEALER. The Investor is not and will not be required to be registered as a “dealer” under the 1934 Act, either as a result of its execution and performance of its obligations under this Agreement or otherwise.

(J) GOOD STANDING. The Investor is a Limited Partnership, duly organized, validly existing and in good standing in the state of Delaware.

(K) TAX LIABILITIES. The Investor understands that it is liable for its own tax liabilities.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth in the Schedules attached hereto, or as disclosed in the Company's SEC Documents, the Company represents and warrants to the Investor that:

(A) ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Nevada, USA and has the requisite corporate power and authorization to own its properties and to carry on its business as now being conducted. Both the Company and the companies it owns or controls (“Subsidiaries”) are duly qualified to do business and are in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (1) the properties, assets, operations, results of operations, or financial condition of the Company and its Subsidiaries, if any, taken as a whole, (2) the transactions contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or (3) the authority or ability of the Company to perform its obligations under the Equity Line Transaction Documents other than as a result of (a) changes adversely affecting the United States economy (so long as the Company is not disproportionately affected thereby), (b) changes adversely affecting the industry in which the Company operates (so long as the Company is not disproportionately affected thereby), (c) the announcement or consummation of the transactions contemplated by this Agreement, and (d) changes in the market price of the Common Stock.

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(B) AUTHORIZATION; ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS.

(1) The Company has the requisite corporate power and authority to enter into and perform the Equity Line Transaction Documents, and to perform its obligations contemplated hereby and thereby.

(2) The execution and delivery of the Equity Line Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby, including without limitation the reservation for issuance and the issuance of the Securities pursuant to this Agreement, have been duly and validly authorized by the Company's Board of Directors and no further consent or authorization is required by the Company, its Board of Directors, or its shareholders.

(3) The Equity Line Transaction Documents have been duly and validly executed and delivered by the Company.

(4) The Equity Line Transaction Documents constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies.

(C) CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of 20,000,000,000 shares of Common Stock with $.00004897 par value per share, of as of June 26, 2013, 39,450,349 shares were issued and outstanding. Except as disclosed in the Company’s publicly available filings with the SEC: (1) no shares of the Company's capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company; (2) there are no outstanding debt securities; (3) there are no outstanding shares of capital stock, options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries; (4) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except the Registration Rights Agreement); (5) there are no outstanding securities of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (6) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities as described in this Agreement; (7) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and (8) there is no dispute as to the classification of any shares of the Company's capital stock.

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The Company has furnished to the Investor, or the Investor has had access through the SEC’s EDGAR website to, true and correct copies of the Company's Articles of Incorporation, as amended and in effect on the date hereof (the “Articles of Incorporation”), and the Company's By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto.

(D) ISSUANCE OF SHARES. The Company has reserved 100,000,000 Shares for issuance pursuant to this Agreement, which have been duly authorized and reserved for issuance (subject to adjustment pursuant to the Company's covenant set forth in Section 5(F) below) pursuant to this Agreement. Upon issuance in accordance with this Agreement, the Securities will be validly issued, fully paid for and non-assessable and free from all taxes, liens and charges with respect to the issue thereof. In the event the Company cannot register a sufficient number of Shares for issuance pursuant to this Agreement, the Company will use its best efforts to authorize and reserve for issuance the number of Shares required for the Company to perform its obligations hereunder as soon as reasonably practicable.

(E) NO CONFLICTS. The execution, delivery and performance of the Equity Line Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby will not (I) result in a violation of the Articles of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the By-laws; or (II) conflict with, or constitute a material default (or an event which with notice or lapse of time or both would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, contract, indenture mortgage, indebtedness or instrument to which the Company or any of its Subsidiaries is a party, or to the Company's knowledge result in a violation of any law, rule, regulation, order, judgment or decree (including United States federal and state securities laws and regulations and the rules and regulations of the Principal Market or principal securities exchange or trading market on which the Common Stock is traded or listed) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected. Except as disclosed in Schedule 4(e), neither the Company nor its Subsidiaries is in violation of any term of, or in default under, the Articles of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the By-laws or their organizational charter or by-laws, respectively, or any contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its Subsidiaries, except for possible conflicts, defaults, terminations, amendments, accelerations, cancellations and violations that would not individually or in the aggregate have or constitute a Material Adverse Effect. The business of the Company and its Subsidiaries is not being conducted, and shall not be conducted, in violation of any law, statute, ordinance, rule, order or regulation of any governmental authority or agency, regulatory or self-regulatory agency, or court, except for possible violations the sanctions for which either individually or in the aggregate would not have a Material Adverse Effect. Except as specifically contemplated by this Agreement and as required under the 1933 Act or any securities laws of any states, to the Company's knowledge, the Company is not required to obtain any consent, authorization, permit or order of, or make any filing or registration (except the filing of a registration statement as outlined in the Registration Rights Agreement between the Parties) with, any court, governmental authority or agency, regulatory or self-regulatory agency or other third party in order for it to execute, deliver or perform any of its obligations under, or contemplated by, the Equity Line Transaction Documents in accordance with the terms hereof or thereof. All consents, authorizations, permits, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof and are in full force and effect as of the date hereof. Except as disclosed in Schedule 4(e), the Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any violation or default of any of the foregoing. The Company is not, and will not be, in violation of the listing requirements of the Principal Market as in effect on the date hereof and on each of the Closing Dates and is not aware of any facts which would reasonably lead to delisting of the Common Stock by the Principal Market in the foreseeable future.

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(F) SEC DOCUMENTS; FINANCIAL STATEMENTS. As of the date hereof, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the "SEC Documents"). The Company has delivered to the Investor or its representatives, or they have had access through the SEC’s EDGAR website to, true and complete copies of the SEC Documents. As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, and audited by a firm that is a member a member of the Public Companies Accounting Oversight Board ("PCAOB") consistently applied, during the periods involved (except (I) as may be otherwise indicated in such financial statements or the notes thereto, or (II) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other written information provided by or on behalf of the Company to the Investor which is not included in the SEC Documents, including, without limitation, information referred to in Section 4(D) of this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstance under which they are or were made, not misleading. Neither the Company nor any of its Subsidiaries or any of their officers, directors, employees or agents have provided the Investor with any material, nonpublic information which was not publicly disclosed prior to the date hereof and any material, nonpublic information provided to the Investor by the Company or its Subsidiaries or any of their officers, directors, employees or agents prior to any Closing Date shall be publicly disclosed by the Company prior to such Closing Date.

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(G) ABSENCE OF CERTAIN CHANGES. Except as otherwise set forth in the SEC Documents, the Company does not intend to change the business operations of the Company in any material way. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any bankruptcy law nor does the Company or its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings.

(H) ABSENCE OF LITIGATION AND/OR REGULATORY PROCEEDINGS. Except as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of Company or any of its Subsidiaries, threatened against or affecting the Company, the Common Stock or any of the Company's Subsidiaries or any of the Company's or the Company's Subsidiaries' officers or directors in their capacities as such, in which an adverse decision could have a Material Adverse Effect.

(I) ACKNOWLEDGMENT REGARDING INVESTOR'S PURCHASE OF SHARES. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm's length purchaser with respect to the Equity Line Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Equity Line Transaction Documents and the transactions contemplated hereby and thereby and any advice given by the Investor or any of its respective representatives or agents in connection with the Equity Line Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Investor's purchase of the Securities, and is not being relied on by the Company. The Company further represents to the Investor that the Company's decision to enter into the Equity Line Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.

(J) NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES. Except as set forth in the SEC Documents, as of the date hereof, no event, liability, development or circumstance has occurred or exists, or to the Company's knowledge is contemplated to occur, with respect to the Company or its Subsidiaries or their respective business, properties, assets, prospects, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws on a registration statement filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced.

(K) EMPLOYEE RELATIONS. Neither the Company nor any of its Subsidiaries is involved in any union labor dispute nor, to the knowledge of the Company or any of its Subsidiaries, is any such dispute threatened. Neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that relations with their employees are good. No executive officer (as defined in Rule 501(f) of the 1933 Act) has notified the Company that such officer intends to leave the Company's employ or otherwise terminate such officer's employment with the Company.

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(L) INTELLECTUAL PROPERTY RIGHTS. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now conducted. Except as set forth in the SEC Documents, none of the Company's trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, government authorizations, trade secrets or other intellectual property rights necessary to conduct its business as now or as proposed to be conducted have expired or terminated, or are expected to expire or terminate within two (2) years from the date of this Agreement. The Company and its Subsidiaries do not have any knowledge of any infringement by the Company or its Subsidiaries of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade secret or other similar rights of others, or of any such development of similar or identical trade secrets or technical information by others and, except as set forth in the SEC Documents, there is no claim, action or proceeding being made or brought against, or to the Company's knowledge, being threatened against, the Company or its Subsidiaries regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement; and the Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and its Subsidiaries have taken commercially reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties.

(M) ENVIRONMENTAL LAWS. The Company and its Subsidiaries (I) are, to the knowledge of the Company and its Subsidiaries, in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"); (II) have, to the knowledge of the Company, received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (III) are in compliance, to the knowledge of the Company, with all terms and conditions of any such permit, license or approval where, in each of the three (3) foregoing cases, the failure to so comply would have, individually or in the aggregate, a Material Adverse Effect.

(N) TITLE. The Company and its Subsidiaries have good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in the SEC Documents or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its Subsidiaries. Any real property and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.

(O) INSURANCE. Each of the Company's Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company reasonably believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought or applied for and neither the Company nor its Subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

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(P) REGULATORY PERMITS. The Company and its Subsidiaries have in full force and effect all certificates, approvals, authorizations and permits from the appropriate federal, state, local or foreign regulatory authorities and comparable foreign regulatory agencies, necessary to own, lease or operate their respective properties and assets and conduct their respective businesses, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, approval, authorization or permit, except for such certificates, approvals, authorizations or permits which if not obtained, or such revocations or modifications which, would not have a Material Adverse Effect.

(Q) INTERNAL ACCOUNTING CONTROLS. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (I) transactions are executed in accordance with management's general or specific authorizations; (II) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles by a firm with membership to the PCAOB and to maintain asset accountability; (III) reasonable controls to safeguard assets are in place; and (IV) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(R) NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree or order which in the judgment of the Company's officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company's officers has or is expected to have a Material Adverse Effect.

(S) TAX STATUS. The Company and each of its Subsidiaries has made or filed all United States federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

(T) CERTAIN TRANSACTIONS. Except as set forth in the SEC Documents filed at least ten (10) days prior to the date hereof and except for arm's length transactions pursuant to which the Company makes payments in the ordinary course of business upon terms no less favorable than the Company could obtain from disinterested third parties and other than the grant of stock options disclosed in the SEC Documents or stock options granted in the future as contemplated by current compensation agreements or plans disclosed in the SEC Documents, none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

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(U) DILUTIVE EFFECT. The Company understands and acknowledges that the number of shares of Common Stock issuable upon purchases pursuant to this Agreement will increase in certain circumstances including, but not necessarily limited to, the circumstance wherein the trading price of the Common Stock declines during the period between the Effective Date and the end of the Open Period. The Company's executive officers and directors have studied and fully understand the nature of the transactions contemplated by this Agreement and recognize that they have a potential dilutive effect on the shareholders of the Company. The Board of Directors of the Company has concluded, in its good faith business judgment, and with full understanding of the implications, that such issuance is in the best interests of the Company. The Company specifically acknowledges that, subject to such limitations as are expressly set forth in the Equity Line Transaction Documents, its obligation to issue shares of Common Stock upon purchases pursuant to this Agreement is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

(V) LOCK-UP. The Company shall cause its officers and directors to refrain from selling Common Stock during each Pricing Period.

(W) NO GENERAL SOLICITATION. Neither the Company, nor any of its affiliates, nor any person acting on its behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Common Stock to be offered as set forth in this Agreement.

(X) NO BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS. No brokers, finders or financial advisory fees or commissions will be payable by the Company, its agents or Subsidiaries, with respect to the transactions contemplated by this Agreement, except as otherwise disclosed in this Agreement.

SECTION 5. COVENANTS OF THE COMPANY

(A) EFFORTS. The Company shall use all commercially reasonable efforts to timely satisfy each of the conditions set forth in Section 8 of this Agreement.

(B) BLUE SKY. The Company shall, at its sole cost and expense, on or before each of the Closing Dates, take such action as the Company shall reasonably determine is necessary to qualify the Securities for, or obtain exemption for the Securities for, sale to the Investor at each of the Closings pursuant to this Agreement under applicable securities or “Blue Sky” laws of such states of the United States, as reasonably specified by the Investor, and shall provide evidence of any such action so taken to the Investor on or prior to the Closing Date.

(C) REPORTING STATUS. Until one of the following occurs, the Company shall file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status, or take an action or fail to take any action, which would terminate its status as a reporting company under the 1934 Act: (1) this Agreement terminates pursuant to Section 9, or (2) the date on which the Investor has sold all the Securities; provided that the Investor shall promptly notify the Company after the Investor has sold all the Securities.

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(D) USE OF PROCEEDS. The Company will use the proceeds from the sale of the Securities (excluding amounts paid by the Company for fees as set forth in the Equity Line Transaction Documents) for general corporate and working capital purposes and acquisitions or assets, businesses or operations or for other purposes that the Board of Directors, in its good faith, deems to be in the best interest of the Company.

(E) FINANCIAL INFORMATION. During the Open Period, the Company agrees to make available to the Investor via the SEC’s EDGAR website or other electronic means the following documents and information on the forms set forth: (1) within five (5) Trading Days after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any Registration Statements or amendments filed pursuant to the 1933 Act; (2) copies of any notices and other information made available or given to the shareholders of the Company generally, contemporaneously with the making available or giving thereof to the shareholders; and (3) within two (2) calendar days of filing or delivery thereof, copies of all documents filed with, and all correspondence sent to, the Principal Market, any securities exchange or market, or the Financial Industry Regulatory Authority, unless such information is material nonpublic information.

(F) RESERVATION OF SHARES. The Company shall reserve 100,000,000 Shares for the issuance of the Securities to the Investor as required hereunder. In the event that the Company determines that it does not have a sufficient number of authorized shares of Common Stock to reserve and keep available for issuance as described in this Section 5(F), the Company shall use all commercially reasonable efforts to increase the number of authorized shares of Common Stock by seeking shareholder approval for the authorization of such additional shares.

(G) LISTING. The Company shall promptly secure and maintain the listing of all of the Registrable Securities (as defined in the Registration Rights Agreement) on the Principal Market and each other national securities exchange and automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and shall maintain, such listing of all Registrable Securities from time to time issuable under the terms of the Equity Line Transaction Documents. Neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market (excluding suspensions of not more than one (1) trading day resulting from business announcements by the Company). The Company shall promptly provide to the Investor copies of any notices it receives from the Principal Market regarding the continued eligibility of the Common Stock for listing on such automated quotation system or securities exchange. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 5(G).

(H) TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall cause each of its Subsidiaries not to, enter into, amend, modify or supplement, or permit any Subsidiary to enter into, amend, modify or supplement, any agreement, transaction, commitment or arrangement with any of its or any Subsidiary's officers, directors, persons who were officers or directors at any time during the previous two (2) years, shareholders who beneficially own 5% or more of the Common Stock, or Affiliates or with any individual related by blood, marriage or adoption to any such individual or with any entity in which any such entity or individual owns a 5% or more beneficial interest (each a “Related Party”), except for (1) customary employment arrangements and benefit programs on reasonable terms, (2) any agreement, transaction, commitment or arrangement on an arms-length basis on terms no less favorable than terms which would have been obtainable from a disinterested third party other than such Related Party,(3) any agreement, transaction, commitment or arrangement which is approved by a majority of the disinterested directors of the Company, or (4) extensions or amendments of any existing employment agreement. For purposes hereof, any director who is also an officer of the Company or any Subsidiary of the Company shall not be a disinterested director with respect to any such agreement, transaction, commitment or arrangement. “Affiliate” for purposes hereof means, with respect to any person or entity, another person or entity that, directly or indirectly, (1) has a 5% or more equity interest in that person or entity, (2) has 5% or more common ownership with that person or entity, (3) controls that person or entity, or (4) is under common control with that person or entity. “Control” or “Controls” for purposes hereof means that a person or entity has the power, directly or indirectly, to conduct or govern the policies of another person or entity.

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(I) FILING OF FORM 8-K. On or before the date which is four (4) Trading Days after the date of execution of this Agreement, the Company shall file a Current Report on Form 8-K with the SEC describing the terms of the transaction contemplated by the Equity Line Transaction Documents in the form required by the 1934 Act, if such filing is required.

(J) CORPORATE EXISTENCE. The Company shall use all commercially reasonable efforts to preserve and continue the corporate existence of the Company.

(K) NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO MAKE A PUT. The Company shall promptly notify the Investor upon the occurrence of any of the following events in respect of a Registration Statement or related prospectus in respect of an offering of the Securities: (1) receipt of any request for additional information by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to the Registration Statement or related prospectus; (2) the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for that purpose; (3) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Securities for sale in any jurisdiction or the initiation or notice of any proceeding for such purpose; (4) the happening of any event that makes any statement made in such Registration Statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related prospectus or documents so that, in the case of a Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (5) the Company's reasonable determination that a post-effective amendment to the Registration Statement would be appropriate, and the Company shall promptly make available to Investor any such supplement or amendment to the related prospectus. The Company shall not deliver to the Investor any Put Notice during the continuation of any of the foregoing events in this Section 5(K).

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(L) REIMBURSEMENT. If (I) the Investor becomes involved in any capacity in any action, proceeding or investigation brought by any shareholder of the Company, in connection with or as a result of the consummation of the transactions contemplated by the Equity Line Transaction Documents, or if the Investor is impleaded in any such action, proceeding or investigation by any person (other than as a result of a breach of the Investor’s representations and warranties set forth in this Agreement); or (II) the Investor becomes involved in any capacity in any action, proceeding or investigation brought by the SEC against or involving the Company (unless the Company is involved in the action, proceeding or investigation as a witness only) or in connection with or as a result of the consummation of the transactions contemplated by the Equity Line Transaction Documents (other than as a result of a breach of the Investor’s representations and warranties set forth in this Agreement), or if this Investor is impleaded in any such action, proceeding or investigation by any person, then in any such case, the Company will reimburse the Investor for its actual, reasonable legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith, as such expenses are incurred. In addition, other than with respect to any matter in which the Investor is a named party, the Company will pay to the Investor the charges, as reasonably determined by the Investor, for the time of any officers or employees of the Investor devoted to appearing and preparing to appear as witnesses, assisting in preparation for hearings, trials or pretrial matters, or otherwise with respect to inquiries, hearing, trials, and other proceedings relating to the subject matter of this Agreement. The reimbursement obligations of the Company under this section shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and conditions to any affiliates of the Investor that are actually named in such action, proceeding or investigation, and partners, directors, agents, employees, attorneys, accountants, auditors and controlling persons (if any), as the case may be, of Investor and any such affiliate, and shall be binding upon and inure to the benefit of any successors of the Company, the Investor and any such affiliate and any such person. However, in all events, if the Investor is found to be guilty of violations of the federal or state securities laws (or pleads “no contest” or other similar plea or settles an investigation or pleading without a specific finding of liability but is still subject to civil or criminal liability), the Company will have no responsibility to pay any of the Investor’s fees and expenses regardless of whether or not the Company is or is also found to have liability.

(M) TRANSFER AGENT. Upon effectiveness of the Registration Statement, and for so long as the Registration Statement is effective, the Company shall deliver instructions to its transfer agent to issue Shares to the Investor that are covered for resale by the Registration Statement free of restrictive legends.

(N) ACKNOWLEDGEMENT OF TERMS. The Company hereby represents and warrants to the Investor that: (1) it is voluntarily entering into this Agreement of its own freewill, (2) it is not entering this Agreement under economic duress, (3) the terms of this Agreement are reasonable and fair to the Company, and (4) the Company has had independent legal counsel of its own choosing review this Agreement, advise the Company with respect to this Agreement, and represent the Company in connection with this Agreement.

SECTION 6. INTENTIONALLY OMITTED.

SECTION 7. CONDITIONS OF THE COMPANY'S OBLIGATION TO SELL. The obligation hereunder of the Company to issue and sell the Securities to the Investor is further subject to the satisfaction, at or before each Closing Date, of each of the following conditions set forth below. These conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion.

(A) The Investor shall have executed this Agreement and the Registration Rights Agreement and delivered the same to the Company.

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(B) The Investor shall have delivered to the Company the Purchase Price for the Securities being purchased by the Investor between the end of the Pricing Period and the Closing Date via a Put Settlement Sheet (hereto attached as Exhibit D). Immediately after receipt of confirmation of delivery of such Securities to the Investor, the Investor, by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company, will disburse the funds constituting the Purchase Amount.

(C) The representations and warranties of the Investor shall be true and correct in all material respects as of the date when made and as of the applicable Closing Date as though made at that time and the Investor shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Equity Line Transaction Documents to be performed, satisfied or complied with by the Investor on or before such Closing Date.

(D) No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.

SECTION 8. FURTHER CONDITIONS OF THE INVESTOR'S OBLIGATION TO PURCHASE. The obligation of the Investor hereunder to purchase Shares is subject to the satisfaction, on or before each Closing Date, of each of the following conditions set forth below.

(A) The Company shall have executed the Equity Line Transaction Documents and Commitment Shares and delivered the same to the Investor.

(B) The Common Stock shall be authorized for quotation on the Principal Market and trading in the Common Stock shall not have been suspended by the Principal Market or the SEC, at any time beginning on the date hereof and through and including the respective Closing Date (excluding suspensions of not more than one (1) Trading Day resulting from business announcements by the Company, provided that such suspensions occur prior to the Company's delivery of the Put Notice related to such Closing).

(C) The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the applicable Closing Date as though made at that time and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Equity Line Transaction Documents to be performed, satisfied or complied with by the Company on or before such Closing Date. The Investor may request an update as of such Closing Date regarding the representation contained in Section 4(C) above.

(D) The Company shall have executed and delivered to the Investor the certificates representing, or have executed electronic book-entry transfer of, the Securities (in such denominations as the Investor shall request) being purchased by the Investor at such Closing.

(E) The Board of Directors of the Company shall have adopted resolutions consistent with Section 4(B)(2) above (the “Resolutions”) and such Resolutions shall not have been amended or rescinded prior to such Closing Date.

(F) INTENTIONALLY OMITTED.

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(G) No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.

(H) The Registration Statement shall be effective on each Closing Date and no stop order suspending the effectiveness of the Registration statement shall be in effect or to the Company's knowledge shall be pending or threatened. Furthermore, on each Closing Date (1) neither the Company nor the Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so (unless the SEC's concerns have been addressed and Investor is reasonably satisfied that the SEC no longer is considering or intends to take such action), and (2) no other suspension of the use or withdrawal of the effectiveness of such Registration Statement or related prospectus shall exist.

(I) At the time of each Closing, the Registration Statement (including information or documents incorporated by reference therein) and any amendments or supplements thereto shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading or which would require public disclosure or an update supplement to the prospectus.

(J) If applicable, the shareholders of the Company shall have approved the issuance of any Shares in excess of the Maximum Common Stock Issuance in accordance with Section 2(H) or the Company shall have obtained appropriate approval pursuant to the requirements of Nevada law and the Company’s Articles of Incorporation and By-laws.

(K) The conditions to such Closing set forth in Section 2(E) shall have been satisfied on or before such Closing Date.

(L) The Company shall have certified to the Investor the number of Shares of Common Stock outstanding when a Put Notice is given to the Investor. The Company's delivery of a Put Notice to the Investor constitutes the Company's certification of the reservation for issuance of the necessary number of shares of Common Stock subject to a Put Notice.

SECTION 9. TERMINATION. This Agreement shall terminate upon any of the following events:

(A) when the Investor has purchased an aggregate of five million dollars $5,000,000 in the Common Stock of the Company pursuant to this Agreement; or,

(B) on the date which is thirty-six (36) months after the Effective Date; or,

(C) upon written notice of the Company to the Investor. Any and all shares, or penalties, if any, due under this Agreement shall be immediately payable and due upon termination of this Agreement.

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SECTION 10. SUSPENSION. The Company’s right to cause the Investor to purchase Shares pursuant to a Put Notice, and the Investor’s obligation to purchase Shares under this Agreement shall be suspended upon any of the following events, and shall remain suspended until such event is rectified:

(A) The trading of the Common Stock is suspended by the SEC, the Principal Market or FINRA for a period of two (2) consecutive Trading Days during the Open Period; or,

(B) The Common Stock ceases to be registered under the 1934 Act or listed or traded on the Principal Market. Immediately upon the occurrence of one of the above-described events, the Company shall send written notice of such event to the Investor.

SECTION 11. INDEMNIFICATION. In consideration of the parties’ mutual obligations set forth in the Transaction Documents, each of the parties (in such capacity, an “Indemnitor”) shall defend, protect, indemnify and hold harmless the other and all of the other party's shareholders, officers, directors, employees, counsel, and direct or indirect investors and any of the foregoing person's agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys' fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (A) any material misrepresentation or breach of any representation or warranty made by the Indemnitor in the Equity Line Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby; (B) any material breach of any covenant, agreement or obligation of the Indemnitor contained in the Equity Line Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby; or (C) any cause of action, suit or claim brought or made against such Indemnitee by a third party and arising out of or resulting from the execution, delivery, performance or enforcement of the Equity Line Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, except insofar as (Y) any such misrepresentation, breach or any untrue statement, alleged untrue statement, omission or alleged omission is made in reliance upon and in conformity with information furnished to Indemnitor which is specifically intended for use in the preparation of any such Registration Statement, preliminary prospectus, prospectus or amendments to the prospectus, (Z) any such Indemnified Liabilities resulted or arose from the breach by the Indemnitee party hereto of any representation, warranty, covenant or agreement of such Indemnitee contained in the Equity Line Transaction Documents or the negligence, recklessness, willful misconduct or bad faith of such Indemnitee. To the extent that the foregoing undertaking by the Indemnitor may be unenforceable for any reason, the Indemnitor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. The indemnity provisions contained herein shall be in addition to any cause of action or similar rights Indemnitor may have, and any liabilities the Indemnitor or the Indemnitees may be subject to.

SECTION 12. GOVERNING LAW; DISPUTES SUBMITTED TO ARBITRATION. All disputes arising under this agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts, without regard to principles of conflict of laws. The parties to this agreement will submit all disputes arising under this agreement to arbitration in Boston, MA before a single arbitrator of the American Arbitration Association (“AAA”). The arbitrator shall be selected by application of the rules of the AAA, or by mutual agreement of the parties, except that such arbitrator shall be an attorney admitted to practice law in Commonwealth of Massachusetts. No party to this Agreement will challenge the jurisdiction or venue provisions as provided in this section. No party to this agreement will challenge the jurisdiction or venue provisions as provided in this section. Nothing contained herein shall prevent the party from obtaining an injunction.

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SECTION 13. LEGAL EXPENSES; AND MISCELLANEOUS EXPENSES. Except as otherwise set forth in the Equity Line Transaction Documents, each party shall pay the fees and expenses of its advisers, counsel, the accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. Any attorneys' fees and expenses incurred by either the Company or the Investor in connection with the preparation, negotiation, execution and delivery of any amendments to this Agreement or relating to the enforcement of the rights of any party, after the occurrence of any breach of the terms of this Agreement by another party or any default by another party in respect of the transactions contemplated hereunder, shall be paid on demand by the party which breached the Agreement and/or defaulted, as the case may be. The Company shall pay all stamp and other taxes and duties levied in connection with the issuance of any Securities. The Company will pay $15,000 toward the preparation of the Equity Line Transaction Documents at the earlier of: 1) Closing of the first Put, directly from the proceeds; or, 2) one hundred twenty (120) days from June 26, 2013. If the Company is not DWAC eligible at the time of a Put Closing, there will be a $2,000 charge on each Closing Date to cover costs associated with, but not limited to: deposit costs, legal review fees and wire fees. If the Company is DWAC eligible at the time of a Put Closing, there will be a $250 charge on each Closing Date.

SECTION 14. COUNTERPARTS. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.

SECTION 15. HEADINGS; SINGULAR/PLURAL. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and masculine shall include the feminine.

SECTION 16. SEVERABILITY. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

SECTION 17. ENTIRE AGREEMENT; AMENDMENTS. This Agreement is the FINAL AGREEMENT between the Company and the Investor with respect to the terms and conditions set forth herein, and, the terms of this Agreement may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the Parties. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Investor, and no provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. The execution and delivery of the Equity Line Transaction Documents shall not alter the force and effect of any other agreements between the Parties, and the obligations under those agreements.

SECTION 18. NOTICES. Any notices or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (A) upon receipt, when delivered personally; (B) upon receipt, when sent by facsimile or email with the signed document attached in PDF format (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (C) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

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If to the Company:

ATTUNE RTD, INC.

3111 Tahquitz Canyon Way

Palm Springs, California 92263

Telephone: (760) 333-3842

If to the Investor:

Dutchess Opportunity Fund, II, LP

50 Commonwealth Avenue, Suite 2

Boston, MA 02116

Telephone: (617) 301-4700

Each party shall provide five (5) days prior written notice to the other party of any change in address or facsimile number.

SECTION 19. NO ASSIGNMENT. This Agreement and any rights, agreements or obligations hereunder may not be assigned, by operation of law, merger or otherwise, without the prior written consent of the other party hereto, and any purported assignment by a party without prior written consent of the other party will be null and void and not binding on such other party. Subject to the preceding sentence, all of the terms, agreements, covenants, representations, warranties and conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by, the parties and their respective successors and assigns.

SECTION 20. NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties hereto and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except that the Company acknowledges that the rights of the Investor may be enforced by its general partner.

SECTION 21. SURVIVAL. The indemnification provisions set forth in Section 11, shall survive each of the Closings and the termination of this Agreement.

SECTION 22. PUBLICITY. The Company and the Investor shall consult with each other in issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise make any such public statement without the prior consent of the other party, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in which such case the disclosing party shall provide the other party with prior notice of such public statement. The Investor acknowledges that this Agreement and all or part of the Equity Line Transaction Documents may be deemed to be “material contracts” as that term is defined by Item 601(b)(10) of Regulation S-B, and that the Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the 1933 Act or the 1934 Act. The Investor further agrees that the status of such documents and materials as material contracts shall be determined solely by the Company, in consultation with its counsel.

AURT.INVESTMENT AGREEMENT.JUNE.2013

23

SECTION 23. FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

SECTION 24. INTENTIONALLY OMITTED.

SECTION 25. NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party, as the parties mutually agree that each has had a full and fair opportunity to review this Agreement and seek the advice of counsel on it.

SECTION 26. REMEDIES. The Investor shall have all rights and remedies set forth in this Agreement and the Registration Rights Agreement and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which the Investor has by law. Any person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any default or breach of any provision of this Agreement, including the recovery of reasonable attorneys fees and costs, and to exercise all other rights granted by law.

SECTION 27. PAYMENT SET ASIDE. To the extent that the Company makes a payment or payments to the Investor hereunder or under the Registration Rights Agreement or the Investor enforces or exercises its rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

SECTION 28. PRICING OF COMMON STOCK. For purposes of this Agreement, the VWAP of the Common Stock shall be as reported on a direct feed service.

SECTION 29. NON-DISCLOSURE OF NON-PUBLIC INFORMATION.

(A) The Company shall not disclose non-public information concerning the Company to the Investor, its advisors, or its representatives.

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24

(B) Nothing herein shall require the Company to disclose non-public information to the Investor or its advisors or representatives, provided, however, that notwithstanding anything herein to the contrary, the Company will, as hereinabove provided, immediately notify the advisors and representatives of the Investor and, if any, underwriters, of any event or the existence of any circumstance (without any obligation to disclose the specific event or circumstance) of which it becomes aware, constituting non-public information (whether or not requested of the Company specifically or generally during the course of due diligence by such persons or entities), which, if not disclosed in the prospectus included in the Registration Statement would cause such prospectus to include a material misstatement or to omit a material fact required to be stated therein in order to make the statements, therein, in light of the circumstances in which they were made, not misleading. Nothing contained in this Section 29 shall be construed to mean that such persons or entities other than the Investor (without the written consent of the Investor prior to disclosure of such information) may not obtain non-public information in the course of conducting due diligence in accordance with the terms of this Agreement and nothing herein shall prevent any such persons or entities from notifying the Company of their opinion that based on such due diligence by such persons or entities, that the Registration Statement contains an untrue statement of material fact or omits a material fact required to be stated in the Registration Statement or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

SECTION 30. ACKNOWLEDGEMENTS OF THE PARTIES. Notwithstanding anything in this Agreement to the contrary, the parties hereto hereby acknowledge and agree to the following: (A) the Investor makes no representations or covenants that it will not engage in trading in the securities of the Company, other than the Investor will not sell any of the Company's common stock at any time during a Pricing Period; (B) the Company shall, by 8:30 a.m. Boston Time on the fourth Trading Day following the date hereof, file a current report on Form 8-K disclosing the material terms of the transactions contemplated hereby and in the other Equity Line Transaction Documents; (C) the Company has not and shall not provide material non-public information to the Investor unless prior thereto the Investor shall have executed a written agreement regarding the confidentiality and use of such information; and (D) the Company understands and confirms that the Investor will be relying on the acknowledgements set forth in clauses (A) through (C) above if the Investor effects any transactions in the securities of the Company.

[Signature Page Follows]

AURT.INVESTMENT AGREEMENT.JUNE.2013

25

SIGNATURE PAGE OF INVESTMENT AGREEMENT

Your signature on this Signature Page evidences your agreement to be bound by the terms and conditions of the Investment Agreement and the Registration Rights Agreement as of the date first written above.

The undersigned signatory hereby certifies that he has read and understands the Investment Agreement, and the representations made by the undersigned in this Investment Agreement are true and accurate, and agrees to be bound by its terms.

DUTCHESS OPPORTUNITY FUND, II, LP
By:
	Douglas H. Leighton Managing Member of: Dutchess Capital Management, II, LLC General Partner to:
	Dutchess Opportunity Fund, II, LP
ATTUNE RTD, INC.
By:
	Shawn Davis
	Chairman & Chief Executive Officer

AURT.INVESTMENT AGREEMENT.JUNE.2013

LIST OF EXHIBITS

EXHIBIT A	Registration Rights Agreement
EXHIBIT B	Opinion of Company's Counsel
EXHIBIT C	Put Notice
EXHIBIT D	Put Settlement Sheet

EXHIBIT A

REGISTRATION RIGHTS AGREEMENT

(Attached)

A-1

EXHIBIT B

OPINION OF COMPANY’S COUNSEL

(Attached)

B-1

EXHIBIT C

FORM OF PUT NOTICE

Date: _______________

RE: Put Notice Number ________

Dear Mr. Leighton:

This is to inform you that as of today, ATTUNE RTD, INC. an Nevada corporation (the "Company"), hereby elects to exercise its right pursuant to the Investment Agreement entered into with Dutchess Opportunity Fund II, LP (“Dutchess”) to require Dutchess to purchase shares of its common stock. The Company hereby certifies that:

1. The undersigned is the duly elected ______________ of the Company.

2. There are no fundamental changes to the information set forth in the Registration Statement which would require the Company to file a post effective amendment to the Registration Statement.

3. The Company has performed in all material respects all covenants and agreements to be performed by the Company and has complied in all material respects with all obligations and conditions contained in this Agreement on or prior to the Put Notice Date, and shall continue to perform in all material respects all covenants and agreements to be performed by the Company through the applicable Put Date. All conditions to the delivery of this Put Notice are satisfied as of the date hereof.

4. The undersigned hereby represents, warrants and covenants that it has made all filings (“SEC Filings”) required to be made by it pursuant to applicable securities laws (including, without limitation, all filings required under the Securities Exchange Act of 1934, which include Forms 10-Q, 10-K, 8-K, etc.). All SEC Filings and other public disclosures made by the Company, including, without limitation, all press releases, analysts meetings and calls, etc. (collectively, the “Public Disclosures”), have been reviewed and approved for release by the Company’s attorneys and, if containing financial information, the Company’s independent certified public accountants. None of the Company’s Public Disclosures contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

5. The amount of this put is up to ___________________ shares.

6. The Pricing Period runs from _____________ until _____________.

7. The Suspension Price is $ ___________________.

8. The current number of shares issued and outstanding as of the Company are: 39,450,349

9. The number of shares currently available for resale pursuant to the Registration Statement on Form S-1 for the Equity Line are:______________________.

[Company Name]

By:

Name:

Title:

EXHIBIT D

FORM OF PUT SETTLEMENT SHEET

Date: _______________

RE: ATTUNE RTD, INC.

Dear ________________:

Pursuant to the Put given by ATTUNE RTD, INC. to Dutchess Opportunity Fund, II, LP on ___________ 20__, we are now submitting the amount of common shares for you to issue to Dutchess.

Please deliver ___________ shares without restrictive legend via book entry to Dutchess Opportunity Fund, II, LP immediately and send via DWAC to the following account:

XXXXXX

Once these shares are received by us, we will have the funds wired to the Company.

Regards,

Douglas H. Leighton

DATE	PRICE
Date of Day 1	VWAP of Day 1
Date of Day 2	VWAP of Day 2
Date of Day 3	VWAP of Day 3
Date of Day 4	VWAP of Day 4
Date of Day 5	VWAP of Day 5

LOWEST VWAP IN PRICING PERIOD

PUT AMOUNT

PURCHASE PRICE (NINETY-FIVE PERCENT (95%))

AMOUNT OF SHARES DUE

The undersigned has completed this Put as of this ___th day of _________, 200_.

ATTUNE RTD, INC.

By:

Name:

Title:

AURT.INVESTMENT AGREEMENT.JUNE.2013

EX-10.14

REGISTRATION RIGHTS AGREEMENT

Registration Rights Agreement (the “Agreement”), dated as of June 26, 2013, by and between ATTUNE RTD, INC., a corporation organized under the laws of Nevada, USA (the “Company”), and Dutchess Opportunity Fund, II, LP, a Delaware Limited Partnership (the “Investor”).

Whereas, in connection with the Investment Agreement by and between the Company and the Investor of this date (the “Investment Agreement”), the Company has agreed to issue and sell to the Investor up to 100,000,000 shares of the Company’s Common Stock, $.00004897 par value per share (the “Common Stock”), to be purchased pursuant to the terms and subject to the conditions set forth in the Investment Agreement; and

Whereas, to induce the Investor to execute and deliver the Investment Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws, with respect to the shares of Common Stock issuable pursuant to the Investment Agreement.

Now therefore, in consideration of the foregoing promises and the mutual covenants contained hereinafter and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

Section 1. DEFINITIONS.

As used in this Agreement, the following terms shall have the following meanings:

“Execution Date” means the date of this Agreement set forth above.

“Person” means a corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency.

“Principal Market” shall mean Nasdaq Capital Market, the NYSE Amex, the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Bulletin Board, whichever is the principal market on which the Common Stock of the Company is listed.

“Register,” “Registered,” and “Registration” refer to the Registration effected by preparing and filing one (1) or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such Registration Statement(s) by the United States Securities and Exchange Commission (the “SEC”).

“Registrable Securities” means (i) the shares of Common Stock issued or issuable pursuant to the Investment Agreement, and (ii) any shares of capital stock issued or issuable with respect to such shares of Common Stock, if any, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, which have not been (x) included in the Registration Statement that has been declared effective by the SEC, or (y) sold under circumstances meeting all of the applicable conditions of Rule 144 (or any similar provision then in force) under the 1933 Act.

ATTUNE RTD.REGISTRATION.RIGHTS.MAY.2013

“Registration Statement” means the registration statement or statements of the Company filed under the 1933 Act covering the Registrable Securities.

All capitalized terms used in this Agreement and not otherwise defined herein shall have the same meaning ascribed to them as in the Investment Agreement.

Section 2. REGISTRATION.

(a) Subject to Section 3(g), the Company shall, within twenty-one (21) days after the date of this Agreement, file with the SEC the Registration Statement or Registration Statements (as is necessary) on Form S-1 (or, if such form is unavailable for such a registration, on such other form as is available for such registration), covering the resale of all of the Registrable Securities, which Registration Statement(s) shall state that, in accordance with Rule 416 promulgated under the 1933 Act, such Registration Statement also covers such indeterminate number of additional shares of Common Stock as may become issuable upon stock splits, stock dividends or similar transactions. The Company shall initially register for resale 100,000,000 shares of Common Stock, except to the extent that the SEC requires the share amount to be reduced as a condition of effectiveness.

(b)The Company agrees not to include any other securities in the Registration Statement covering the Registrable Securities without the Investor’s prior written consent which the Investor may withhold in its sole discretion. Furthermore, the Company agrees that it will not file any other Registration Statement for other securities, until thirty calendar days after the Registration Statement for the Registrable Securities is declared effective by the SEC.

Section 3. RELATED OBLIGATIONS.

At such time as the Company is obligated to prepare and file the Registration Statement with the SEC pursuant to Section 2(a), the Company shall have the following obligations with respect to the Registration Statement:

(a) The Company shall use all commercially reasonable efforts to cause such Registration Statement relating to the Registrable Securities to become effective within ninety (90) days after the date that the Registration Statement is filed and shall keep such Registration Statement effective until the earlier to occur of the date on which (A) the Investor shall have sold all the Registrable Securities; or (B) the Company has no right to sell any additional shares of Common Stock under the Investment Agreement (the “Registration Period”). The Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. The Company shall use all commercially reasonable efforts to respond to all SEC comments within ten (10) business days from receipt of such comments by the Company. The Company shall use all commercially reasonable efforts to cause the Registration Statement relating to the Registrable Securities to become effective no later than five (5) business days after notice from the SEC that the Registration Statement may be declared effective. The Investor agrees to provide all information which it is required by law to provide to the Company, including the intended method of disposition of the Registrable Securities, and the Company’s obligations set forth above shall be conditioned on the receipt of such information.

AURT.REGISTRATION.RIGHTS.MAY.2013

2

(b) The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the Investor thereof as set forth in such Registration Statement. In the event the number of shares of Common Stock covered by the Registration Statement filed pursuant to this Agreement is at any time insufficient to cover all of the Registrable Securities, the Company shall amend such Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover all of the Registrable Securities, in each case, as soon as practicable, but in any event within fifty (50) calendar days after the necessity therefor arises (based on the then Purchase Price of the Common Stock and other relevant factors on which the Company reasonably elects to rely), assuming the Company has sufficient authorized shares at that time, and if it does not, within fifty (50) calendar days after such shares are authorized. The Company shall use commercially reasonable efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof.

(c) The Company shall make available to the Investor whose Registrable Securities are included in any Registration Statement and its legal counsel without charge (i) if requested by the Investor, promptly after the same is prepared and filed with the SEC at least one (1) copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits, the prospectus included in such Registration Statement (including each preliminary prospectus) and, with regards to such Registration Statement(s), any correspondence by or on behalf of the Company to the SEC or the staff of the SEC and any correspondence from the SEC or the staff of the SEC to the Company or its representatives; and (ii) upon the effectiveness of any Registration Statement, the Company shall make available copies of the prospectus, via EDGAR, included in such Registration Statement and all amendments and supplements thereto.

(d)The Company shall use commercially reasonable efforts to (i) register and qualify the Registrable Securities covered by the Registration Statement under such other securities or “blue sky” laws of such states in the United States as the Investor reasonably requests; (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period; (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), or (y) subject itself to general taxation in any such jurisdiction. The Company shall promptly notify the Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

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(e)As promptly as practicable after becoming aware of such event, the Company shall notify the Investor in writing of the happening of any event as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (“Registration Default”) and use all diligent efforts to promptly prepare a supplement or amendment to such Registration Statement and take any other necessary steps to cure the Registration Default (which, if such Registration Statement is on Form S-3, may consist of a document to be filed by the Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act (as defined below) and to be incorporated by reference in the prospectus) to correct such untrue statement or omission, and make available copies of such supplement or amendment to the Investor. The Company shall also promptly notify the Investor (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when the Registration Statement or any post-effective amendment has become effective; (ii) of any request by the SEC for amendments or supplements to the Registration Statement or related prospectus or related information, (iii) of the Company’s reasonable determination that a post-effective amendment to the Registration Statement would be appropriate, (iv) in the event the Registration Statement is no longer effective, or (v) if the Registration Statement is stale as a result of the Company’s failure to timely file its financials or otherwise. If a Registration Default occurs during the period commencing on the Put Notice Date and ending on the Closing Date, the Company acknowledges that its failure to cure such a Registration Default within ten (10) business days will cause the Investor to suffer damages in an amount that will be difficult to ascertain.

(f)The Company shall use all commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of the Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Investor holding Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding concerning the effectiveness of the Registration Statement.

(g)The Company shall permit the Investor and one (1) legal counsel, designated by the Investor, to review and comment upon the Registration Statement and all amendments and supplements thereto at least one (1) calendar day prior to their filing with the SEC. However, any postponement of a filing of a Registration Statement or any postponement of a request for acceleration or any postponement of the effective date or effectiveness of a Registration Statement by written request of the Investor (collectively, the “Investor’s Delay”) shall not act to trigger any penalty of any kind, or any cash amount due or any in-kind amount due the Investor from the Company under any and all agreements of any nature or kind between the Company and the Investor. The event(s) of an Investor’s Delay shall act to suspend all obligations of any kind or nature of the Company under any and all agreements of any nature or kind between the Company and the Investor.

(h)Intentionally Omitted.

ATTUNE RTD.REGISTRATION.RIGHTS.MAY.2013

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(i)The Company shall hold in confidence and not make any disclosure of information concerning the Investor unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement, or (v) the Investor has consented to such disclosure. The Company agrees that it shall, upon learning that disclosure of such information concerning the Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Investor and allow the Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order covering such information.

(j)The Company shall use all commercially reasonable efforts to maintain designation and quotation of all the Registrable Securities covered by any Registration Statement on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(j).

(k)Intentionally Omitted.

(l)The Company shall provide a transfer agent for all the Registrable Securities not later than the effective date of the first Registration Statement filed pursuant hereto.

(m)If requested by the Investor, the Company shall (i) as soon as reasonably practical incorporate in a prospectus supplement or post-effective amendment such information as the Investor reasonably determines should be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment as soon as reasonably possible after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested by the Investor.

(n)The Company shall use all commercially reasonable efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to facilitate the disposition of such Registrable Securities.

(o)The Company shall otherwise use all commercially reasonable efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

(p)Within one (1) business day after the Registration Statement which includes Registrable Securities is declared effective by the SEC, the Company shall deliver to the transfer agent for such Registrable Securities, with copies to the Investor, a written notification that such Registration Statement has been declared effective by the SEC.

ATTUNE RTD.REGISTRATION.RIGHTS.MAY.2013

5

Section 4. OBLIGATIONS OF THE INVESTOR.

(a)At least five (5) calendar days prior to the first anticipated filing date of the Registration Statement the Company shall notify the Investor in writing of the information the Company requires from the Investor for the Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities and the Investor agrees to furnish to the Company that information regarding itself, the Registrable Securities and the intended method of disposition of the Registrable Securities as shall reasonably be required to effect the registration of the resale of such Registrable Securities and the Investor shall execute such documents in connection with such registration as the Company may reasonably request. The Investor covenants and agrees that, in connection with any sale of Registrable Securities by it pursuant to the Registration Statement, it shall comply with the “Plan of Distribution” section of the then current prospectus relating to such Registration Statement.

(b)The Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder.

(c)The Investor agrees that, upon receipt of written notice from the Company of the happening of any event of the kind described in Section 3(f) or the first sentence of Section 3(e), the Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering the resale of such Registrable Securities until the Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(f) or the first sentence of Section 3(e).

Section 5. EXPENSES OF REGISTRATION.

All reasonable expenses, other than underwriting discounts and commissions and other than as set forth in the Investment Agreement, incurred in connection with registrations including comments, filings or qualifications pursuant to Section 2 and Section 3, including, without limitation, all registration, listing and qualifications fees, printing and accounting fees, and fees and disbursements of counsel for the Company shall be paid by the Company.

Section 6. INDEMNIFICATION.

In the event any Registrable Securities are included in the Registration Statement under this Agreement:

(a)To the fullest extent permitted by law, the Company, under this Agreement, will, and hereby does, indemnify, hold harmless and defend the Investor, the directors, officers, partners, employees, counsel, agents, representatives of, and each Person, if any, who controls, the Investor within the meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended (the “1934 Act”) (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys’ fees, amounts paid in settlement or expenses, joint or several (collectively, “Claims”), incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in

ATTUNE RTD.REGISTRATION.RIGHTS.MAY.2013

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respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in the Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which the Investor has requested in writing that the Company register or qualify the Shares (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which the statements therein were made, not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in the final prospectus for the offer of the Registrable Securities (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to the Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”). Subject to the restrictions set forth in Section 6(c) the Company shall reimburse each Indemnified Person, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim arising out of or based upon a Violation which is due to the inclusion in the Registration Statement of the information furnished to the Company by any Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto; (ii) shall not be available to the extent such Claim is based on (A) a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company; (B) the Indemnified Person’s use of an incorrect prospectus despite being promptly advised in advance by the Company in writing not to use such incorrect prospectus; (C) the manner of sale of the Registrable Securities by the Investor or of the Investor’s failure to register as a dealer under applicable securities laws; (D) any omission of the Investor to notify the Company of any material fact that should be stated in the Registration Statement or prospectus relating to the Investor or the manner of sale; and (E) any amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the resale of the Registrable Securities by the Investor pursuant to the Registration Statement; and (iii) shall not be available to the extent the Claim arises out of the gross negligence or willful misconduct of the Indemnified Person.

(b)In connection with any Registration Statement in which the Investor is participating, the Investor agrees to severally and jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, officers, employees, counsel, agents and representatives and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation is due to (i) the inclusion in the Registration Statement of the written information furnished to the Company by the Investor expressly for use in connection with such Registration Statement; (ii) a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company or the Investor’s use of an incorrect prospectus despite being timely advised by the Company in writing not to use such incorrect prospectus; (iii) the Investor’s failure to register as a dealer under applicable securities laws; (iv) the Investor’s gross negligence or willful misconduct; or (v) any omission of the Investor to notify the Company of any material fact that should be stated in the Registration Statement or prospectus relating to the Investor or the manner of sale; and, subject to Section 6(c), the Investor will reimburse any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Investor, which consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the resale of the Registrable Securities by the Investor pursuant to the Registration Statement.

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(c)Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party, as the case may be, shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the Indemnified Person or Indemnified Party, the representation by counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The indemnifying party shall pay for only one (1) separate legal counsel for the Indemnified Persons or the Indemnified Parties, as applicable, and such counsel shall be selected by the Investor, if the Investor is entitled to indemnification hereunder, or the Company, if the Company is entitled to indemnification hereunder, as applicable. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding affected without its written consent; provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

(d)The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

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Section 7. CONTRIBUTION.

To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6; (ii) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.

Section 8. REPORTS UNDER THE 1934 ACT.

With a view to making available to the Investor the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration (“Rule 144”), provided that the Investor holds any Registrable Securities which are eligible for resale under Rule 144 and such information is necessary in order for the Investor to sell such Securities pursuant to Rule 144, the Company agrees to:

(a)make and keep public information available, as those terms are understood and defined in Rule 144;

(b)file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall limit the Company’s obligations under Section 5(c) of the Investment Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

(c)furnish to the Investor, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act applicable to the Company, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration.

Section 9. NO ASSIGNMENT OF REGISTRATION RIGHTS.

This Agreement and the rights, agreements or obligations hereunder may not be assigned, by operation of law, merger or otherwise, and without the prior written consent of the other party hereto, and any purported assignment by a party without prior written consent of the other party will be null and void and not binding on such other party. Subject to the preceding sentence, all of the terms, agreements, covenants, representations, warranties and conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by, the parties and their respective successors and assigns.

ATTUNE RTD.REGISTRATION.RIGHTS.MAY.2013

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Section 10. AMENDMENT OF REGISTRATION RIGHTS.

The provisions of this Agreement may be amended only with the written consent of the Company and the Investor.

Section 11. MISCELLANEOUS.

(a)Any notices or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or email with the signed document attached in PDF format (provided a confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

ATTUNE RTD, INC.

3111 Tahquitz Canyon Way

Palm Springs, California 92263

Telephone: (760) 333-3842

If to the Investor:

Dutchess Opportunity Fund, II, LP

50 Commonwealth Ave, Suite 2

Boston, MA 02116

Telephone: (617) 301-4700

Each party shall provide five (5) business days prior notice to the other party of any change in address, phone number, facsimile number ore-mail address.

(b)Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

(c)This Agreement and the Investment Agreement constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein.

(d)This Agreement and the Investment Agreement supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

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(e)The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. Whenever required by the context of this Agreement, the singular shall include the plural and masculine shall include the feminine. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if all the parties had prepared the same.

(f)This Agreement may be executed in two or more identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission or by e-mail delivery of a PDF format of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

(g)Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

(h)In case any provision of this Agreement is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Agreement will not in any way be affected or impaired thereby.

Section 12. GOVERNING LAW; DISPUTES SUBMITTED TO ARBITRATION.

All disputes arising under this agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts, without regard to principles of conflict of laws. The parties to this agreement will submit all disputes arising under this agreement to arbitration in Boston, Massachusetts before a single arbitrator of the American Arbitration Association (“AAA”). The arbitrator shall be selected by application of the rules of the AAA, or by mutual agreement of the parties, except that such arbitrator shall be an attorney admitted to practice law in the Commonwealth of Massachusetts. No party to this agreement will challenge the jurisdiction or venue provisions as provided in this section. Nothing contained herein shall prevent the party from obtaining an injunction.

* * *

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SIGNATURE PAGE OF REGISTRATION RIGHTS AGREEMENT

Your signature on this Signature Page evidences your agreement to be bound by the terms and conditions of the Investment Agreement and the Registration Rights Agreement as of the date first written above.

The undersigned signatory hereby certifies that he has read and understands the Registration Rights Agreement, and the representations made by the undersigned in this Registration Rights Agreement are true and accurate, and agrees to be bound by its terms.

DUTCHESS OPPORTUNITY FUND, II, LP,
By:
	Douglas H. Leighton
	Managing Member of:
	Dutchess Capital Management, II, LLC
	General Partner to:
	Dutchess Opportunity Fund, II, LP
ATTUNE RTD, INC.
By:
	Shawn Davis
	Chairman & Chief Executive Officer

Signature Page to Registration Rights Agreement

EX-10.15

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of August 5, 2013, by and between ATTUNE RTD, a Nevada corporation, with headquarters located at 3111 Tahquitz Canyon Way, Palm Springs, CA 92263 (the “Company”), and ASHER ENTERPRISES, INC., a Delaware corporation, with its address at 1 Linden Place, Suite 207, Great Neck, NY 11021 (the “Buyer”).

WHEREAS:

A. The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);

B. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement an 8% convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $10,000.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, $0.00004897 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.

C. The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately below its name on the signature pages hereto; and

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

1. Purchase and Sale of Note.

a. Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

b. Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

c. Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about August 7, 2013, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

2. Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:

a. Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are issuable (i) on account of interest on the Note, (ii) as a result of the events described in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f) below) pursuant to this Agreement, such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

b. Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

c. Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

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d. Information. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company’s representations and warranties made herein.

e. Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

f. Transfer or Re-sale. The Buyer understands that (i) the sale or resale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

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g. Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

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h. Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

i. Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto.

3. Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

a. Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

b. Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

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c. Capitalization. As of the date hereof, the authorized capital stock of the Company consists of: (i) 20,000,000,000 shares of Class A Common Stock, $0.00004897 par value per share, of which approximately 34,450,349 shares are issued and outstanding; and (ii) 1,000,000 shares of Class B Participating Cumulative Preferred Super Voting Stock, $0.0166 par value per share, of which 1,000,000 shares are issued and outstanding; (iii) 5,000,000 shares of Preferred Stock, $$0.0166 par value per share of which no shares are issued and outstanding; no shares are reserved for issuance pursuant to the Company’s stock option plans, 4,000,000 shares are reserved for issuance pursuant to securities (other than 900,000 shares in warrants and the Note and five (5) prior convertible promissory notes in favor of the Buyer: (a) a prior convertible promissory note in favor of the Buyer dated September 28, 2011 in the amount of $42,500.00, the principal of which is now reduced to $39,750.00, for which 1,831,837 shares of Common Stock are presently reserved; (b) prior convertible promissory note in favor of the Buyer dated December 7, 2011 in the amount of $42,500.00 for which 5,500,000 shares of Common Stock are presently reserved and (c) prior convertible promissory note in favor of the Buyer dated December 3, 2012 in the amount of $3,000.00 for which 700,000 shares of Common Stock are presently reserved and (d) prior convertible promissory note in favor of the Buyer dated February 26, 2013 in the amount of $50,000.00 for which 5,068,163 shares of Common Stock are presently reserved and (e) prior convertible promissory note in favor of the Buyer dated April 18, 2013 in the amount of $22,500.00 for which 7,400,000 shares of Common Stock are presently reserved) exercisable for, or convertible into or exchangeable for shares of Common Stock and 104,700,000 shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no antidilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

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d. Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

e. Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

f. No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”) and does not reasonably anticipate that the Common Stock will be delisted by the OTCBB in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

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g. SEC Documents; Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”). Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to March 31, 2013, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act.

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h. Absence of Certain Changes. Since March 31, 2013, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

i. Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

j. Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); there is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.

k. No Materially Adverse Contracts. Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.

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l. Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s tax returns is presently being audited by any taxing authority.

m. Certain Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties and other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

n. Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).

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o. Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

p. 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 in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

q. No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

r. Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Since March 31, 2013, neither the Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

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s. Environmental Matters.

(i) There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

(ii) Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s or any of its Subsidiaries’ business.

(iii) There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with applicable law.

t. Title to Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(f) or such as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.

u. Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to directors’ and officers’ liability coverage, errors and omissions coverage, and commercial general liability coverage.

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v. Internal Accounting Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

w. Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

x. Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (“i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.

y. No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”). The Company is not controlled by an Investment Company.

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z. Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the Note.

4. COVENANTS.

a. Best Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.

b. Form D; Blue Sky Laws. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the Closing Date.

c. Use of Proceeds. The Company shall use the proceeds for general working capital purposes.

d. Right of First Refusal. Unless it shall have first delivered to the Buyer, at least seventy two (72) hours prior to the closing of such Future Offering (as defined herein), written notice describing the proposed Future Offering, including the terms and conditions thereof and proposed definitive documentation to be entered into in connection therewith, and providing the Buyer an option during the seventy two (72) hour period following delivery of such notice to purchase the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence and the preceding sentence are collectively referred to as the “Right of First Refusal”) (and subject to the exceptions described below), the Company will not conduct any equity financing (including debt with an equity component) (“Future Offerings”) during the period beginning on the Closing Date and ending twelve (12) months following the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the seventy two (72) hour period following delivery of such new notice to purchase its pro rata share of the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence shall apply to successive amendments to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall not apply to any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule 415 under the 1933 Act) or (ii) issuances of securities as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company. The Right of First Refusal also shall not apply to the issuance of securities upon exercise or conversion of the Company’s options, warrants or other convertible securities outstanding as of the date hereof or to the grant of additional options or warrants, or the issuance of additional securities, under any Company stock option or restricted stock plan approved by the shareholders of the Company. The Right of First Refusal shall apply only to like transaction (i.e convertible debentures) that are in excess of $150,00.00.

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e. Expenses. At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer. The Company’s obligation with respect to this transaction is to reimburse Buyer’ expenses shall be $500.

f. Financial Information. Upon written request the Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or other information the Company makes available or gives to such shareholders.

g. [INTENTIONALLY DELETED]

h. Listing. The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the American Stock Exchange (“AMEX”) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the OTCBB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.

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i. Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

j. No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

k. Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.4 of the Note.

l. Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

m. Trading Activities. Neither the Buyer nor its affiliates has an open short position in the common stock of the Company and the Buyer agree that it shall not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.

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5. Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold), will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement. Nothing in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the Company, at the cost of the Buyer, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

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6. Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

a. The Buyer shall have executed this Agreement and delivered the same to the Company.

b. The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

c. The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

d. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

7. Conditions to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

a. The Company shall have executed this Agreement and delivered the same to the Buyer.

b. The Company shall have delivered to the Buyer the duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

c. The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.

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d. The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions relating to the transactions contemplated hereby.

e. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

f. No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

g. The Conversion Shares shall have been authorized for quotation on the OTCBB and trading in the Common Stock on the OTCBB shall not have been suspended by the SEC or the OTCBB.

h. The Buyer shall have received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.

8. Governing Law; Miscellaneous.

a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. 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 New York or in the federal courts located in the state and county of Nassau. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

19

b. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

c. Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

d. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e. Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

f. 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:

20

If to the Company, to:

ATTUNE RTD

3111 Tahquitz Canyon Way

Palm Springs, CA 92263

Attn: THOMAS BIANCO, Chief Financial Officer

facsimile: [enter fax number]

With a copy by fax only to (which copy shall not constitute notice):

[enter name of law firm] The Law Offices of Gary Blum

Attn: [attorney name] Gary Blum

[enter address line 1] 3728 Wilshire Blvd, Suite 603

[enter city, state, zip] Los Angeles, CA 90010

(213) 384-1035

Facsimile: [enter fax number]

If to the Buyer:

ASHER ENTERPRISES, INC.

1 Linden PL., Suite 207

Great Neck, NY. 11021

Attn: Curt Kramer, President

facsimile: 516-498-9894

With a copy by fax only to (which copy shall not constitute notice):

Naidich Wurman Birnbaum & Maday LLP

80 Cuttermill Road, Suite 410

Great Neck, NY 11021

facsimile: 516-466-3555

Each party shall provide notice to the other party of any change in address.

g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

21

h. Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

i. Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

j. Publicity. The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC, OTCBB or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC, OTCBB (or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).

k. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

l. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

m. Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

22

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

ATTUNE RTD
BY:	/S/ THOMAS BIANCO, C.F.O.
	THOMAS BIANCO, C.F.O (For the Company)
	Chief Financial Officer

ASHER ENTERPRISES, INC.

By:
Name:	Curt Kramer
Title:	President
	1 Linden Pl., Suite 207
	Great Neck, NY. 11021

AGGREGATE SUBSCRIPTION AMOUNT:
Aggregate Principal Amount of Note:	$10,000.00
Aggregate Purchase Price:	$10,000.00
3529(6) 8-5-13 tbianco@attunertd.com sdavis@attunertd.com mgelmon@telusplanetnet

23

EX-10.16

Beacon Global Partners, llc

236 West Portal Avenue, #320 • San Francisco • CA • 94127 • 510-364-0939

April 1, 2014

Mr. Shawn Davis, CEO

Attune RTD., Inc.

3111 Tahquitz Canyon Way

Palm Spring, California 92263

Dear Mr. Davis:

I was very encouraged by our conversation and hope we can move forward with an agreement for the acquisition of at least 51% of the voting securities of Attune RTD, Inc. (the “Company”), by Beacon Global Partners, LLC (the “BGP”).

On behalf of my partner Samuel R. Starr and myself, I am pleased to submit this Letter of Intent regarding the acquisition.

It is our understanding that that Company and its Board of Directors, after appropriate due diligence, have determined that is in the best interest of the Company’s shareholders to enter into this potential transaction. Therefore, this Letter of Intent is to confirm our mutual intentions with respect to the potential transaction described herein. This Letter of Intent is precedent to a formal binding change of control agreement (the “Agreement’) and a Stock Purchase Agreement (the “SPA”)

The acquisition of at least 51% of the voting securities of the Company will be through blank check stock in exchange for ongoing funding, an amount to be determined by the parties.

It is the Purchaser’s intention to assume control of the Company pursuant to the potential transaction described herein, with details to be worked through and binding terms effective within fifteen days of the filing of the Company’s Annual Report to the Securities and Exchange Commission (SEC), on the form 10-K for the year ending December 31, 2013 (the “10-K”).

The parties enter into this Letter of Intent in good faith and fair dealing to facilitate and execute the terms and conditions set forth herein for the purpose of executing the Transaction, and no other purpose:

1.	Purchaser, the Company and the Executives agree to keep this Letter of Intent strictly confidential; until such time that a report has been filed by the Company with the Securities and Exchange Commission (the “SEC”) and/or a public announcement has been made as to the Transaction.
2.	All parties have agreed to a Closing Date of March 31, 2015 (the “Closing Date”)
3.	Acquisition:

a.

The Purchaser agrees to pay Shawn Davis, the Company’s Chief Executive Officer and Thomas Bianco, the Company’s Chief Financial Officer (collectively the “Executives”), five hundred and twenty thousand dollars each ($520,000), the “Buyout Amount’, by the Closing Date. Fifty-nine thousand dollars ($59,000) of which has been paid to the Executives for compensation of services and Sixty-one thousand ($61,000) of which is to be paid for compensation of services beginning on the date of execution of this LOI and continuing to the Closing Date. These funds are non-refundable under any circumstances, except as stated in Section 7b. All associated taxes on these funds are to be paid by BGP.

b.

The parties will endeavor to negotiate and execute any and all documents required to execute the Transaction, including, but not limited to, an SPA, consisting of 3,000,000 restricted shares each of the Executives Class A Common Stock holdings at a fixed price of $400,000 each. All associated taxes on these funds are to be paid by BGP.

c.	The total buyout consists of $400,000 + $59,000 + $61,000 = $520,000, the entire Buyout Amount to each of the Executives.
d.	Purchaser further agrees to provide the Company with ongoing capital financing as of the effective date of this Letter of Intent and to continue such financing until such time as it is able to deliver the entire Buyout Amount.

4.	Effective immediately upon the filing of the Company’s 10-K, the Executives will resign their respective positions and suspend their existing employment and severance agreements. The Executives agree to suspend their entire accrued payroll obligation with the Company
5.	The Executives will continue to serve in their current roles on the Company’s Board of Directors, uninterrupted, through the Closing Date.
6.	Effective immediately upon the filing the Company’s 10-K, Kenneth Miller will assume the position of CEO and a position on the Board of Directors and Samuel Starr will assume the position of Chief Operating Officer (COO) and a position on the Board of Directors. The Company’s Board of Directors at that time will consist of Messrs. Davis, Bianco, Miller, and Starr.
7.	The parties agree that Purchaser will receive a thirty-day grace period to cure non-payment, or late payment, of amounts owed under the Agreement Such thirty-day period will begin on the day the payment is delinquent, and end thirty calendar days later. Non-payment conditions continuing beyond that date represent termination of the Agreement Purchaser understands and agrees that nonpayment, or failure to pay the entire amount as stipulated hereunder, without curing the condition on or during the grace period, represents default. If the default is not cured pursuant to the terms of the Agreement, Purchaser agrees to:

a.	terminate the Agreement,
b.	forfeit of all Company and Board of Director positions,
c.	and the Executives will immediately be reappointed to their Company positions, as they were prior to execution of this Letter of Intent.

8. In the event of default, termination, bankruptcy, foreclosure, insolvency or liquidation proceedings, the
Purchaser agrees to receive common stock for any amount paid towards the Buyout Amount from the
Executives and any and all capital put into the Company for expense and debt reduction purposes,
divided by the conversion price of $0.13 per share from the Executives and/or the Company, within
fifteen business days. The Purchaser also agrees to pay all transfer agent fees.

a. Also, in the event of default, termination, bankruptcy, foreclosure, insolvency or liquidation proceedings, any and all amounts paid to the Executives will be deemed non-refundable and or non-returnable under any circumstances, except as stated above.

9. Intellectual Property:

a. Upon Closing, the Company retains all patents, pending patents, source coding and all Intellectual Property for the BrioWave Technology (the “Technology”) and any and all pending or existing products including but not limited to; all Solar Technology, DC Motor Technology, Well Pump Technology and any and all other concepts (the “Concepts”]; in development by the Executives at the time of execution of the Agreement; not withstanding any manufacturing, distribution, marketing and sales rights, as well as any and all, products, molds, blueprints, assets, source codes, formulas, research or anything pertaining to the Technology or Concepts, and not specifically stated in this Letter of Intent or recorded as an asset of the Company.

10. Continuity:

a.	Once the terms and conditions of the Agreement have been satisfied, the Executives each agree to:
i.	forgive and cancel any and all amounts of accrued interest reported and carried on the Company’s balance sheet generated from their respective preferred stock holdings,
ii.	forgive the entire amounts of their accrued deferred compensation,
iii.	surrender their respective preferred stockholdings in full to the Company treasury for cancellation,
iv.	terminate their respective employment and severance agreements,
v.	and surrender 3,000,000 shares each of their restricted common stock.
b.	In the event of termination of the Executives employment and/or relationship with the
	Company, either by Purchaser after Closing or resignation by the Executive, each of the
	Executives agree not compete with the Company or Purchaser for a period of three (3) years
	after the date of termination.
c.	In the event of termination of this Letter of Intent, the Company agree not to contact any of the
	Purchaser’s investors for a period of two years from the date of termination, or without first
	obtaining prior written permission from Purchaser.

11. Governance

a. This Letter of Intent and the subsequent Agreement shall be governed by and construed in accordance with the laws of the State of California.

If the foregoing is acceptable to the Company and the Executives, please so indicate in the spaces provided below and return one signed original to us.

	Beacon Global Partners, LLC (Purchaser)
By:		Date:	4/2/2014
	Kenneth J Miller Jr.
	Chief Executive Officer
By:		Date:	4/2/2014
	Samuel R. Starr
	Chief Operating Officer

	ACCEPTED AND AGREED:
	Attune RTD.LLC (Company)	Date:	4/2/2014
By:
	Shawn Davis for the company Chief Executive Officer
	THE EXECUTIVES	Date:	4/2/2014
	Shawn Davis FOR THE COMPANY
	Thomas Bianco FOR THE COMPANY	Date:	4/2/2014

EX-10.17

Amendment to the “Letter of Intent” from Beacon Global Partners, LLC; dated April 1, 2014 and executed by Davis, Bianco, Miller and Starr collectively on April 2, 2014.

The parties (Davis, Bianco, Miller and Starr) collectively agree to amend the “Letter of Intent”, and intend for the following understanding regarding the Board of Directors to be included in the Letter of Intent and any formal binding agreements that follow without condition.

1)	“The Board of directors will consist of Davis, Bianco, Miller and Starr. Davis’ vote on the Board of Directors will account for 30%, Bianco’s vote will account for 30%, Millers vote will account for 20% and Starr’s vote will account for 20%.
2)	Collectively, Davis and Bianco will maintain 60% voting majority on the Board of Directors until BGP, LLC is able to close or the “Letter of Intent” terminates, whichever comes first.
3)	Collectively, Miller and Starr will hold 40% of the minority vote
4)	In the event something should happen to Davis, his vote in entirety shall pass uninterrupted to Bianco with all rights, and this notice shall serve as power of attorney for executing such and Bianco shall have the right without condition to vote on behalf of Davis. In the event something should happen to Bianco, his vote in entirety shall pass uninterrupted to Davis with all rights, and this notice shall serve as power of attorney for executing such and Davis shall have the right without condition to vote on behalf of Bianco.
5)	In the event something should happen to Miller, his vote in entirety shall pass uninterrupted to Starr with all rights, and this notice shall serve as power of attorney for executing such and Starr shall have the right without condition to vote on behalf of Miller. In the event something should happen to Starr, his vote in entirety shall pass uninterrupted to Miller with all rights, and this notice shall serve as power of attorney for executing such and Miller shall have the right without condition to vote on behalf of Starr.
6)	Any future Board Members will serve for a term limit not to exceed three years, or until closing, whichever comes first.
7)	This understanding shall not change, and will be included in any future agreement.
8)	No other changes to the Letter of Intent are implied or follow.

We agree and affix our signatures

FOR THE COMPANY	DATE	4/8/2014
CFO	DATE	4/8/2014
	DATE	4/8/2014
	DATE	4/8/2014

EX-99.0

  

EX-99.1

samuel r. starr

San Jose, CA ▪ 408.482.0382 ▪ Email: samstarr@comcast.net

innovative Executive

EXECUTIVE SUMMARY

Innovative leader actively developed revolutionary industry technology. Solutions oriented executive capable of dramatically expanding markets and creating fresh relevant products for consumers.

PROFILE

Relationship building Leader able to develop buy-in and a teamwork approach to project management.

Talented Innovator instrumental in the design and development of the first Transportable Satellite Uplink that began a new industry and transformed the way television was consumed.

Marketing Expert responsible for a broadcast and satellite distribution network resulting in fifty-eight million viewers.

CORE COMPETENCIES

●	Executive Management	●	Negotiation
●	Creative Development & Planning	●	Productivity & Performance Improvement
●	Product & Services Marketing	●	Product Research & Evaluation
●	Strategic Analysis & Account Planning	●	Organization & Communication

EMPLOYMENT EXPERIENCE

Self employed, San Jose, CA 1983 – present

Consultant for Broadcast, Cable and Satellite Networks

Principal in charge of all services from conception, operation, management training, Federal Communications Commission (FCC) requirements and regulations, to profitability and success.

● Clients include

● HBO

● Compact Video

● Taylor Made Productions

● DeRance Foundation

● Public Broadcast Systems (PBS)

● Trinity Broadcast Network (TBN)

● PTL Satellite Network

● Success in Life Network

● Dr. Robert Schuller Hour of Power

● Dr. Mike Murdock

● The Wisdom Center

Trinity Broadcast Network (TBN), Santa Ana, CA 1972 – 1982

Director of Satellite Services

Founding Director responsible for conception, establishment, development, built-out, and distribution of consumer based content from the largest broadcasting network in the world.

● Developed and built-out the largest national satellite network in the world reaching over fifty-eight million consumers in the first year of operation.

● Conceived and manufactured the first transportable uplink in the world in conjunction with Scientific Atlanta (now Cisco Systems)

● Managed all Owned and Operated Broadcast stations.

● Implemented program syndication to Central and South America.

● Created and produced programming content for broadcast stations and networks.

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

 I, Shawn Davis, certify that:

1.	I have reviewed this annual report on Form 10-K of Attune RTD, 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.

Date: April 15, 2014

/s/ Shawn Davis

Shawn Davis

Chief Executive Officer

(Principal Executive Officer) 

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Thomas Bianco, certify that:

1.	I have reviewed this annual report on Form 10-K of Attune RTD, 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.

Date: April 15, 2014

/s/ Thomas Bianco

Thomas Bianco 

Chief Financial Officer 

(Principal Financial Officer) 

EX-32.1

Exhibit 32.1

CERTIFICATION 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 filing of this annual report of Attune RTD, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2013 (the “Form 10-K”), as filed with the Securities and Exchange Commission on the date hereof, I, Shawn Davis, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Form 10-K 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 Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Shawn Davis

Shawn Davis

Chief Executive Officer

(Principal Executive Officer)

Dated: April 15, 2014

EX-32.2

Exhibit 32.2

CERTIFICATION 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 filing of this annual report of Attune RTD, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2013 (the “Form 10-K”), as filed with the Securities and Exchange Commission on the date hereof, I, Thomas Bianco, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Form 10-K 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 Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thomas Bianco

Thomas Bianco 

Chief Financial Officer 

(Principal Financial Officer) 

Dated: April 15, 2014

XML

Common Stock (Details Narrative) (USD $)

0 Months Ended

1 Months Ended

3 Months Ended

6 Months Ended

12 Months Ended

78 Months Ended

12 Months Ended

0 Months Ended

1 Months Ended

6 Months Ended

12 Months Ended

6 Months Ended

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1 Months Ended

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12 Months Ended

Mar. 21, 2013

Feb. 27, 2013

Sep. 07, 2007

Mar. 31, 2010

Aug. 31, 2009

Dec. 31, 2013

Jun. 30, 2013

Dec. 31, 2007

Dec. 31, 2007

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

Dec. 31, 2013

Mar. 04, 2013

Oct. 31, 2011

Dec. 31, 2013

2010 Equity Incentive Plan [Member]

Jan. 30, 2013

Shawn Davis [Member]

Jan. 30, 2013

Thomas Bianco [Member]

Jan. 30, 2013

Thomas Bianco And Shawn Davis [Member]

Jul. 25, 2013

Common Stock - Class A [Member]

Jul. 24, 2013

Common Stock - Class A [Member]

Jun. 30, 2013

Common Stock - Class A [Member]

Mar. 05, 2013

Common Stock - Class A [Member]

May 16, 2012

Common Stock - Class A [Member]

Mar. 28, 2013

Common Stock - Class A [Member]

Feb. 28, 2013

Common Stock - Class A [Member]

Feb. 28, 2013

Common Stock - Class A [Member]

Jan. 31, 2013

Common Stock - Class A [Member]

Dec. 31, 2012

Common Stock - Class A [Member]

Oct. 31, 2012

Common Stock - Class A [Member]

Sep. 30, 2012

Common Stock - Class A [Member]

Jul. 31, 2012

Common Stock - Class A [Member]

Jun. 30, 2012

Common Stock - Class A [Member]

Mar. 31, 2012

Common Stock - Class A [Member]

Nov. 30, 2011

Common Stock - Class A [Member]

Aug. 31, 2011

Common Stock - Class A [Member]

Jun. 30, 2011

Common Stock - Class A [Member]

Dec. 31, 2010

Common Stock - Class A [Member]

Jul. 31, 2010

Common Stock - Class A [Member]

Jun. 30, 2010

Common Stock - Class A [Member]

Jan. 31, 2010

Common Stock - Class A [Member]

Aug. 31, 2009

Common Stock - Class A [Member]

Jul. 31, 2009

Common Stock - Class A [Member]

Jun. 30, 2009

Common Stock - Class A [Member]

Mar. 31, 2009

Common Stock - Class A [Member]

Feb. 28, 2009

Common Stock - Class A [Member]

Dec. 31, 2007

Common Stock - Class A [Member]

Dec. 31, 2013

Common Stock - Class A [Member]

Dec. 31, 2012

Common Stock - Class A [Member]

Dec. 31, 2011

Common Stock - Class A [Member]

Dec. 31, 2010

Common Stock - Class A [Member]

Dec. 31, 2009

Common Stock - Class A [Member]

Dec. 31, 2008

Common Stock - Class A [Member]

Nov. 28, 2007

Common Stock - Class A [Member]

Sep. 30, 2010

Common Stock - Class A [Member]

2010 Equity Incentive Plan [Member]

Dec. 31, 2007

Common Stock - Class A [Member]

Founder [Member]

Dec. 31, 2007

Class B Participating Cumulative Preferred Super-Voting Stock [Member]

Nov. 28, 2007

Class B Participating Cumulative Preferred Super-Voting Stock [Member]

Dec. 31, 2007

Class B Participating Cumulative Preferred Super-Voting Stock [Member]

Founder [Member]

Mar. 04, 2013

Class B Cumulative Preferred Stock

Mar. 04, 2013

Minimum [Member]

Sep. 07, 2007

Minimum [Member]

Dec. 31, 2010

Minimum [Member]

Common Stock - Class A [Member]

Mar. 04, 2013

Maximum [Member]

Sep. 07, 2007

Maximum [Member]

Jun. 30, 2010

Maximum [Member]

Common Stock - Class A [Member]

Dec. 31, 2007

Maximum [Member]

Common Stock - Class A [Member]

Dec. 31, 2011

Maximum [Member]

Common Stock - Class A [Member]

Dec. 31, 2010

Maximum [Member]

Common Stock - Class A [Member]

Dec. 31, 2009

Maximum [Member]

Common Stock - Class A [Member]

Dec. 31, 2008

Maximum [Member]

Common Stock - Class A [Member]

Common stock authorized to issue, number

20,000,000,000

20,000,000,000

20,000,000,000

20,000,000,000

59,000,000

(59,000,000)

50,000

(20,000,000,000)

1,000,000

Forward stock split

280 for 1

Common stock, par value

$ 0.00004897

$ 0.00004897

$ 0.00004897

$ 0.00004897

$ 0.0166

$ 0.0166

$ 0.00004897

Preferred stock, par value

$ 0.0166

$ 0.0166

$ 0.0166

$ 0.0166

$ 0.0166

$ 0.0166

$ 0.0166

Preferred stock, shares authorized

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

(5,000,000)

Percentage of preferred stock dividend rate issued

6.00%

6.00%

6.00%

6.00%

6.00%

6.00%

Undeclared Class B Preferred Stock dividends during period

$ 9,487

$ 130,987

$ 110,737

$ 90,487

$ 70,237

$ 49,987

$ 29,737

Stock issued during period for consideration of cash

36,000

81,000

12,500

153,000

1,318,750

442,181

437,435

360,250

36,000

12,500

153,000

1,318,750

442,181

437,435

360,250

45,000

Stock issued during period for consideration of cash, shares

224,000

357,143

1,530,000

6,349,750

2,138,610

3,688,438

2,352,803

133,333

Price per share of stock issued during period

$ 0.35

$ 0.13

$ 0.05

$ 0.10

$ 0.10

$ 0.10

$ 0.10

$ 0.10

$ 0.10

$ 0.10

$ 0.10

$ 0.10

$ 0.20

$ 0.20

$ 0.27

$ 0.15

$ 0.20

$ 0.25

$ 0.15

$ 0.15

$ 0.30

$ 0.15

$ 0.035

$ 0.10

$ 0.20

$ 0.18

$ 0.04

$ 0.13

$ 0.0166

$ 0.3375

$ 0.3375

$ 0.50

$ 0.25

$ 0.35

$ 0.35

$ 0.35

$ 0.25

Payment of cash offering cost

11,000

2,500

7,000

1,500

Proceeds form sale of stock

12,500

153,000

2,760,117

Stock issued during period for consideration of services

36,000

30,000

1,204

300,830

649,750

200,890

250,050

341,005

11,150

34,530

600,000

18,000

30,000

7,250

600,000

12,500

36,000

33,500

88,890

12,500

12,500

20,000

10,000

220,050

28,050

37,500

270,200

5,250

6,150

2,600

2,400

7,500

34,530

232,400

Stock issued during period for consideration of services, shares

360,000

300,000

72,500

3,000,000

3,000,000

360,000

300,000

72,500

6,000,000

125,000

360,000

275,000

888,900

125,000

125,000

100,000

50,000

815,000

55,000

250,000

750,000

21,000

41,000

17,333

8,000

500,000

50,000

169,000

14,000,000

866,667

Common stock shares authorized to issue for services, shares

197,500

Common stock shares authorized to issue for services

19,750

Stock issued for services expenses

232,400

Stock issued during period for exchange of liability, shares

788,571

500,000

247,249

100,000

1,000,000

862,069

2,000,000

591,133

137,931

139,944

247,249

100,000

Stock issued during period for exchange of liability

55,200

39,272

48,980

35,000

55,200

20,000

15,000

7,600

12,000

8,000

48,980

39,272

35,000

Stock issued during period for exchange of liability, price per share

$ 0.15

$ 0.02

$ 0.02

$ 0.02

$ 0.12

$ 0.15

$ 0.10

$ 0.36

Gain or loss on conversion of debt

62,637

49,615

20,000

Shares valued on cash sales

118,286

16,793

15,000

Interest expense on conversion of debt to equity

449

23,586

24,035

Total cumulative liability to guarantee equity value

90,980

90,980

90,980

83,980

90,980

Number of warrants issued and attached to issuance of common stock

900,000

Warrants expiry date

Apr. 15, 2013

Derivative liability

40,498

Share based compensation stock granted during period

4,000,000

Share based compensation stock issued during period

800,000

Convertible notes payable to related parties

$ 10,000

$ 10,000

$ 10,000

XML

Subsequent Events (Details Narrative) (Beacon Global Partners, LLC [Member])	0 Months Ended
	Apr. 02, 2013
Beacon Global Partners, LLC [Member]
Percentage of voting control by issuance of blank check	51.00%
Percentage of voting securities held at least by agreement	51.00%
Percentage of voting securities hold as of date	0.00%

XML

Investment Offer (Details Narrative) (USD $)	0 Months Ended
	Oct. 05, 2013	Dec. 31, 2013	Dec. 31, 2012
Fixed amount of investment	$ 159,560
Percentage of cumulative payout over time equal to five times their initial investment	50.00%
Royalty Payable		22,000	22,000
Three Investors [Member]
Investment total amount	$ 22,000
Investor One [Member]
Percentage of royalty paid to investors	6.27%
Investor Two [Member]
Percentage of royalty paid to investors	6.27%
Investor Three [Member]
Percentage of royalty paid to investors	1.25%

XML

Property and Equipment - Schedule of Property and Equipment (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Property and equipment, gross		$ 130,023
Less total Accumulated depreciation		(51,526)
Property and equipment, net		78,497
Computers [Member]
Property and equipment, Est. Useful Lives	P5Y
Property and equipment, gross		10,227
Office Equipment [Member]
Property and equipment, Est. Useful Lives	P5Y
Property and equipment, gross		5,606
Vehicles [Member]
Property and equipment, Est. Useful Lives	P5Y
Property and equipment, gross		$ 114,190

XML

Derivative Liability (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Schedule of Derivative Liability

The following presents the derivative liability value at December 30, 2013 and 2012:

	December 31, 2013		December 31, 2012
Convertible Note - Related party	$	169,785	$	110,828
	$	169,785	$	110,828

Schedule of Changes in Fair Market Value of Derivative Liability

The following is a summary of changes in the fair market value of the derivative liability during the period ended December 31, 2013 and 2012:

Balance, December 31, 2011	$	121,546
Increase in derivative due to issuance of convertible note		35,002
Change in fair market value of derivative liabilities due to the mark to market adjustment		(38,946	)
Decrease due to debt conversion		(6,774	)
Balance, December 31, 2012		110,828
Increase in derivative value due to issuance of convertible notes		78,388
Increase in derivative value due to tainting of warrants		30,116
Change in fair market value of derivative liabilities due to the mark to market adjustment		(13,056	)
Decrease due to debt conversion		(36,491	)
Balance, December 31, 2013	$	169,785

XML

Income Taxes - Schedule of Deferred Tax Assets (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
NOL Carryforward	$ (598,399)	$ (637,429)
Net Deferred Tax assets before valuation allowance	954,812	745,373
Valuation allowances	(954,812)	(745,373)
Total	$ 0	$ 0

XML

Derivative Liability - Schedule of Derivative Liability (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2010	Mar. 31, 2010
Fair Value Disclosures [Abstract]
Convertible Note - Related party	$ 169,785	$ 110,828	$ 24,000	$ 24,000
Derivative Liability	$ 169,785	$ 110,828

XML

Investment Agreement (Details) (Dutchess [Member], USD $)	0 Months Ended
	Jun. 26, 2013
Dutchess [Member]
Payments to purchase of common stock	$ 5,000,000
Percentage of purchase price lowest daily volume weighted average price five consecutive trading days	95.00%
Percentage of average daily volume of common stock for three consecutive trading dats	200.00%
Number of shares beneficially held at exceed	$ 100,000
Percentage of shares beneficially held at exceed	4.99%

XML

Patents and Trademarks

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Patents and Trademark

3. PATENTS AND TRADEMARKS

In December 2011, the Company assessed its patents and trademarks and due to uncertainty of future funding and commercialization, the Company recognized a loss on its trademark and patents in the amount of $62,634, the carrying value at the time of impairment.

In December 2012, the Company assessed its software and due to uncertainty of future funding and commercialization, the Company recognized a loss on its software in the amount of $74,269, the carrying value at the time of impairment.

XML

Income Taxes - Schedule of Income Taxes (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Federal and state statutory rate	35.00%	35.00%
Change in valuation allowance on deferred tax assets	(35.00%)	(35.00%)

XML

Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Gain (Loss) on Derivative Liability	$ (21,240)	$ 38,946
Gain (Loss) on Fair Value of Derivative	(21,240)	38,946
Level 1 [Member]
Derivative Liability
Total
Level 2 [Member]
Derivative Liability
Total
Level 3 [Member]
Derivative Liability	169,785	110,828
Total	$ 169,785	$ 110,828

XML

Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Property and Equipment Useful Lives (Details)	12 Months Ended
	Dec. 31, 2013
Vehicles [Member]
Property, Plant and Equipment, Useful Life	5 years
Computers [Member]
Property, Plant and Equipment, Useful Life	5 years
Office Equipment [Member]
Property, Plant and Equipment, Useful Life	5 years

XML

Commitments and Contingencies (Details Narrative) (USD $)

0 Months Ended

1 Months Ended

3 Months Ended

6 Months Ended

12 Months Ended

0 Months Ended

0 Months Ended

12 Months Ended

0 Months Ended

0 Months Ended

Sep. 24, 2013

Mar. 21, 2013

Feb. 27, 2013

Jan. 30, 2013

Sep. 21, 2010

Jul. 30, 2013

Mar. 31, 2010

Dec. 31, 2013

Dec. 31, 2007

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

Mar. 04, 2013

Sep. 25, 2011

Sep. 21, 2010

Restricted Class A Common Stock

Mar. 04, 2013

Minimum [Member]

Sep. 07, 2007

Minimum [Member]

Mar. 04, 2013

Maximum [Member]

Sep. 07, 2007

Maximum [Member]

Dec. 31, 2013

Mr. Davis [Member]

Dec. 31, 2013

Mr. Bianco [Member]

Jul. 10, 2013

Mr. Stone [Member]

Jan. 30, 2013

Shawn Davis [Member]

Mar. 26, 2008

Shawn Davis [Member]

Dec. 31, 2013

Shawn Davis [Member]

Jan. 30, 2013

Thomas Bianco [Member]

Mar. 26, 2008

Thomas Bianco [Member]

Dec. 31, 2013

Thomas Bianco [Member]

Salary to officers

$ 185,000

$ 185,000

$ 120,000

$ 120,000

Percentage of aggregate severance amount equal to employees annual base salary

300.00%

Percentage of unvested portion of all options held by Employees

100.00%

Accrued salaries to officers

277,101

277,101

181,538

220,701

220,755

Common stock, shares authorized

20,000,000,000

20,000,000,000

20,000,000,000

(59,000,000)

50,000

(20,000,000,000)

1,000,000

Common stock, par value

$ 0.00004897

$ 0.00004897

$ 0.00004897

$ 0.0166

$ 0.00004897

Number of voting rights on each share

 one hundred votes per share

 twenty thousand votes per share

Preferred stock, shares issued

1,000,000

1,000,000

1,000,000

(5,000,000)

Preferred stock, par value

$ 0.0166

$ 0.0166

$ 0.0166

$ 0.0166

Operating leases rent expense

0

11,600

Shares issued for services, shares

360,000

300,000

72,500

250,000

3,000,000

3,000,000

Shares issued for services

36,000

30,000

1,204

300,830

649,750

200,890

250,050

341,005

11,150

34,530

Stock issued per share

$ 0.35

$ 0.13

Payment to vendor for services

70,618

Maximum cost to vendor for services

89,435

Additional cost of services

18,818

Contingent liability

18,818

Number of shares needs to fund to receive related party investments

750,000

750,000

Shares issued to related party on resolving the litigation issue

50,000

Share stock certificate agreement for receiving funds

The Company negotiated the size of the stock certificate based on the amount of money Mr. Stone claimed the Fund would deliver in the time period and based on promises he allegedly secured from pre-existing relationships, amounting to an aggregate of $100,000 - $200,000 in funds that he stated would begin arriving at the Company within the first few weeks.

Demand on immediate payment on loan

120,000

Note interest outstanding principal balance percentage

150.00%

Impairment on software assets

$ 74,269

XML

Going Concern (Details Narrative) (USD $)	6 Months Ended	12 Months Ended						78 Months Ended
	Dec. 31, 2007	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2013
Going Concern
Net loss	$ 441,633	$ 1,360,596	$ 953,445	$ 1,379,285	$ 1,036,938	$ 645,946	$ 422,612	$ 6,240,455
Net cash used in operations		242,493	434,260					2,873,253
Working capital deficit		1,341,608						1,341,608
Accumulated deficit during the development stage		$ 6,240,455	$ 4,879,859					$ 6,240,455

XML

Patents and Trademarks (Details Narrative) (USD $)	12 Months Ended			78 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
Impairment of Patent, Trademarks and Software		$ 74,269	$ 62,634	$ 74,269
Impairment on software assets		$ 74,269

XML

Going Concern

12 Months Ended

Dec. 31, 2013

Going Concern

Going Concern

2. GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. For the years ended December 31, 2013 and 2012, the Company had a net loss of $1,360,596 and $953,445, respectively, and net cash used in operations of $242,493 and $434,260, respectively, and was a development stage company with little to no revenues. In addition, as of December 31, 2013, the Company had a working capital deficit of $1,341,608 and a deficit accumulated during the development stage of $6,240,455.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties.

In order to execute its business plan, the Company will need to raise additional working capital and generate revenues. There can be no assurance that the Company will be able to obtain the necessary working capital or generate revenues to execute its business plan.

Management’s plan to increase working capital includes completing product development, generating marketing agreements with product distributors and raising additional funds through a private placement offering or offerings of the Company’s common stock.

Management believes its business development and capital raising activities will provide the Company with the ability to continue as a going concern. 

XML

Property and Equipment (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Abstract]
Property and equipment, depreciation expense	$ 12,547	$ 28,715

XML

Guarantee of Equity Value (Details Narrative) (USD $)	1 Months Ended	12 Months Ended
	Mar. 31, 2010	Dec. 31, 2013	Dec. 31, 2011	Dec. 31, 2008	Dec. 31, 2012	Dec. 31, 2010	Dec. 31, 2009
Guarantee Of Equity Value
Common stock Class A shares issued on conversion of liabilities	120,000
Convertible liabilities	$ 24,000	$ 169,785			$ 110,828	$ 24,000
Value of common stock shares issued on conversion of liabilities	42,000
Common stock value per share	$ 0.35			$ 0.13
Loss on conversion of debt	18,000
Guarantee liability						11,000
Total guarantee liability						35,000
Gain on forgiveness of debt			25,000
Cash payment towards total payable outstanding		3,000
Total cumulative liability to guarantee equity value		$ 90,980			$ 90,980		$ 83,980

XML

Balance Sheets (USD $)	Dec. 31, 2013	Dec. 31, 2012
Current Assets
Cash
Total Current Assets	0	0
Property and Equipment, net		78,497
Total Assets	0	78,497
Current Liabilities
Accounts Payable and Accrued Expenses	254,915	145,372
Accrued Salaries	401,456	181,537
Royalty Payable	22,000	22,000
Deferred Revenue		10,000
Liability to Guarantee Equity Value	90,980	90,980
Convertible Note Payable (portion in default), net of discount of $16,898 and $2,696 at December 31, 2013 and 2012, respectively	155,502	120,304
Related Party Debt	29,620	10,184
Note Payable in default	217,350	171,107
Derivative Liability	169,785	110,828
Total Current Liabilities	1,341,608	862,312
Total Liabilities	1,341,608	862,312
Commitments and Contingencies (See Note 11)
Stockholders' Deficit
Class B Participating Cumulative Preferred Super voting Stock, $0.0166 par value; 1,000,000 shares authorized; 1,000,000 issued and outstanding at December 31, 2013 and 2012, respectively	16,600	16,600
Class A Common Stock, $0.00004897 par value; 20,000,000,000 shares authorized; 43,312,429 and 32,126,727 shares issued and outstanding at December 31, 2013 and 2012, respectively	2,121	1,573
Additional Paid-in Capital	4,842,626	4,029,371
Stock Payable	37,500	48,500
Deficit accumulated during development stage	(6,240,455)	(4,879,859)
Total Stockholders' Deficit	(1,341,608)	(783,815)
Total Liabilities and Stockholders' Deficit	$ 0	$ 78,497

XML

Related Party Transactions (Details Narrative) (USD $)	0 Months Ended		3 Months Ended	6 Months Ended	12 Months Ended						78 Months Ended		1 Months Ended																					6 Months Ended	12 Months Ended		19 Months Ended	12 Months Ended	19 Months Ended	12 Months Ended
	Mar. 21, 2013	Feb. 27, 2013	Dec. 31, 2013	Dec. 31, 2007	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2013	Jul. 23, 2012	Mar. 28, 2013 Common Stock - Class A [Member]	Feb. 28, 2013 Common Stock - Class A [Member]	Feb. 28, 2013 Common Stock - Class A [Member]	Jan. 31, 2013 Common Stock - Class A [Member]	Dec. 31, 2012 Common Stock - Class A [Member]	Oct. 31, 2012 Common Stock - Class A [Member]	Sep. 30, 2012 Common Stock - Class A [Member]	Jul. 31, 2012 Common Stock - Class A [Member]	Jun. 30, 2012 Common Stock - Class A [Member]	Mar. 31, 2012 Common Stock - Class A [Member]	Nov. 30, 2011 Common Stock - Class A [Member]	Aug. 31, 2011 Common Stock - Class A [Member]	Jun. 30, 2011 Common Stock - Class A [Member]	Dec. 31, 2010 Common Stock - Class A [Member]	Jul. 31, 2010 Common Stock - Class A [Member]	Jun. 30, 2010 Common Stock - Class A [Member]	Jan. 31, 2010 Common Stock - Class A [Member]	Aug. 31, 2009 Common Stock - Class A [Member]	Jun. 30, 2009 Common Stock - Class A [Member]	Mar. 31, 2009 Common Stock - Class A [Member]	Feb. 28, 2009 Common Stock - Class A [Member]	Dec. 31, 2007 Common Stock - Class A [Member]	Dec. 31, 2008 Common Stock - Class A [Member]	Dec. 31, 2013 Mr. Davis [Member]	Dec. 31, 2012 Mr. Davis [Member]	Dec. 31, 2013 Mr. Bianco [Member]	Dec. 31, 2012 Mr. Bianco [Member]	Dec. 31, 2013 Mr. Davis [Member] Common Stock - Class A [Member]	Dec. 31, 2013 Mr. Stone [Member] Common Stock - Class A [Member]
Unsecured loan due to Secretary Timothy Smith												$ 10,000
Advance from a related party					29,436	10,184					99,620
Common stock at a conversion price					$ 0.13
Capital contributed for payment of vehicles by CEO and CFO					4,647						4,647																									4,647		4,647
Contributed capital payments made for vehicles					6,590	15,808					31,936																										756		756
Accrued salaries			277,101		277,101	181,538					277,101
Agreed amount reduced from officers salary						20,000
Debt related to balance owed on the two trucks					70,764	70,764
Debt related to balance owned on net book value					65,949	65,949
Forgave salary, related party			10,000		10,000						10,000																									20,000		20,000
Salary payable																																				401,511		401,511
Issuance of stock for services, shares	360,000	300,000	72,500										360,000	300,000	72,500	6,000,000	125,000	360,000	275,000	888,900	125,000	125,000	100,000	50,000	815,000	55,000	250,000	750,000	21,000	41,000	17,333	8,000	500,000	50,000	169,000					3,000,000	3,000,000
Issuance of stock for services	$ 36,000	$ 30,000	$ 1,204	$ 300,830	$ 649,750	$ 200,890	$ 250,050	$ 341,005	$ 11,150	$ 34,530			$ 18,000	$ 30,000	$ 7,250	$ 600,000	$ 12,500	$ 36,000	$ 33,500	$ 88,890	$ 12,500	$ 12,500	$ 20,000	$ 10,000	$ 220,050	$ 28,050	$ 37,500	$ 270,200	$ 5,250	$ 6,150	$ 2,600	$ 2,400		$ 7,500	$ 34,530					$ 600,000	$ 600,000

XML

Statements of Cash Flows (USD $)	12 Months Ended		78 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$ (1,360,596)	$ (953,445)	$ (6,240,455)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Class A common stock and preferred stock granted for services	649,750	200,890	1,788,205
Contributed Capital			111,781
Depreciation and Amortization	89,704	97,703	243,307
Interest expense on conversion to Class A common stock		23,586	24,035
Loss on conversions of debt to Class A common stock			147,252
Gain on asset theft, net			(29,125)
Impairment of Patent, Trademarks and Software		74,269	136,902
Change in Fair Value-Derivative	21,240	(38,946)	69,410
Bad Debt Expense			9,000
Gain on forgiveness of debt			(25,000)
Penalty Expense on defaulting – Asher Enterprises	1,500	43,000	5,800
Changes in Assets and Liabilities:
Accounts Receivable		9,783	(9,000)
Prepaid Expenses		2,706
Security Deposit		1,800	(1,794)
Accounts Payable and Accrued Expenses	355,909	72,270	672,026
Accrued Salary			117,874
Liability to Guarantee Equity Value			35,000
Deferred Financing Costs		124	829
Deferred Revenue		10,000	10,000
Royalty Payable		22,000	22,000
NET CASH USED IN OPERATING ACTIVITIES	(242,493)	(434,260)	(2,873,253)
CASH FLOWS FROM INVESTING ACTIVITIES:
Deferred Patent costs			(41,378)
Trademark costs			(21,254)
Loans receivable from Officers			(175,825)
Insurance proceeds on asset theft			30,961
Cash paid for purchase of fixed assets			(27,820)
Disposition of fixed assets			1,500
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES			(233,816)
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributed Capital	4,647		4,647
Sale of Class A - Common Stock	12,500	153,000	2,760,117
Offering costs related to the Sale of Class A - Common Stock			(11,000)
Sale of Class B - Preferred Stock			45,000
Principal Payments on Capital Lease Obligations		(530)	(5,809)
Loan Payable to Principal Stockholder	29,436	10,184	99,620
Repayment of Loan Payable to Principal Stockholder			(4,800)
Borrowings on Debt	202,500	45,500	288,000
Principal payment on truck loans	(6,590)	(15,808)	(31,936)
Principal payments on Software Licensing		(12,223)	(31,768)
Cash Paid for Redemption of Stock			(5,000)
NET CASH PROVIDED BY FINANCING ACTIVITIES	242,493	180,123	3,107,069
NET INCREASE (DECREASE) IN CASH	0	(254,137)	0
CASH AT BEGINNING OF YEAR		254,137
CASH AT END OF YEAR
Cash paid during the year:
Interest Expense	98,942	75,862	176,871
Income Tax
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Conversion of a Vendor Liability into Shares of Class A Common Stock			40,000
Capital Lease Obligation Recorded as Property and Equipment			7,058
Conversion of a shareholder loan into shares of Class A common stock			55,200
Reclassification of equity to liability to guarantee equity value due to price guarantee upon conversion			70,000
Reclassification of accounts payable to liability to guarantee equity value due to price guarantee upon conversion			48,980
Capitalization of Deferred Financing Costs			2,500
Debt Discount	74,208	34,748	108,956
Conversion of Debt	54,600	8,000	62,600
Derivative Adjustment due to Debt Conversion	36,491	6,774	43,264
Redemption of stock by officers for loan repayment			175,828
Financing of Software costs			117,270
Financing of Truck Purchase			114,190
Shares accrued in the prior period and issued in current period	36,000		36,000
Disposal of Truck	65,949		65,949
Reclassification of Deferred revenue	10,000		10,000
Forgiveness of salary by related party	$ 40,000		$ 40,000

XML

Convertible Note (Details Narrative) (USD $)	0 Months Ended	12 Months Ended			78 Months Ended			0 Months Ended						12 Months Ended		0 Months Ended	12 Months Ended		0 Months Ended	12 Months Ended		0 Months Ended	12 Months Ended	0 Months Ended	12 Months Ended	0 Months Ended	12 Months Ended
	Jan. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2010	Dec. 31, 2013	Mar. 31, 2010	Aug. 31, 2009	Jun. 21, 2013 Warrants [Member]	Oct. 31, 2013 Convertible Note One [Member]	Jul. 31, 2013 Convertible Note One [Member]	Mar. 31, 2013 Convertible Note One [Member]	May 31, 2012 Convertible Note One [Member]	Sep. 30, 2011 Convertible Note One [Member]	Dec. 31, 2013 Convertible Note One [Member]	Dec. 31, 2012 Convertible Note One [Member]	Jan. 05, 2012 Convertible Note Two [Member]	Dec. 31, 2013 Convertible Note Two [Member]	Dec. 31, 2012 Convertible Note Two [Member]	Dec. 03, 2013 Convertible Note Three [Member]	Dec. 31, 2013 Convertible Note Three [Member]	Dec. 03, 2012 Convertible Note Three [Member]	Feb. 21, 2013 Convertible Note Four [Member]	Dec. 31, 2013 Convertible Note Four [Member]	Apr. 18, 2013 Convertible Note Five [Member]	Dec. 31, 2013 Convertible Note Five [Member]	Aug. 05, 2013 Convertible Note Six [Member]	Dec. 31, 2013 Convertible Note Six [Member]	Dec. 31, 2013 Related Party Convertible Note [Member]	Dec. 31, 2012 Related Party Convertible Note [Member]	Dec. 31, 2013 Related Party Convertible One Note [Member]
Convertible promissory note		$ 169,785	$ 110,828	$ 24,000	$ 169,785	$ 24,000							$ 42,500			$ 42,500					$ 3,000	$ 50,000		$ 22,500		$ 10,000		$ 10,000		$ 10,000
Convertible note maturity date													Jul. 31, 2012			Jul. 31, 2012			Sep. 05, 2013			Nov. 25, 2013		Jan. 22, 2014		May 07, 2014
Debt instrument initial conversion price		$ 0.02			$ 0.02		$ 0.15																					$ 0.02
Convertible promissory note, interest rate													8.00%			8.00%			8.00%			8.00%		8.00%		8.00%
Percentage of conversion price for note													58.00%			58.00%			58.00%			50.00%		45.00%		35.00%
Debt discount rate													42.00%								58.00%	50.00%		55.00%		65.00%
Derivative debt discount									34,430							31,748			3,000			38,864		21,824	12,546	10,000	2,444	3,546
Penalty expense on defaulting		1,500	43,000		5,800										17,250			21,250		1,500								1,500
Class A Common Stock issued for convertible note, shares									2,000,000	862,069	591,133	137,931																1,000,000
Class A Common Stock issued for convertible note		54,600	8,000		62,600				7,600	15,000	12,000	8,000
Debt due remaining														17,150			63,750			4,500			50,000		22,500		10,000	89,900	120,000
Accrued interest														2,823			5,280			266			3,430		1,267		324
Demand on immediate payment on loan	120,000
Note interest outstanding principal balance percentage	150.00%
Warrant Issuance amount		$ 30,116						$ 2,750,000
Maturity date of warrant				Apr. 15, 2013				Jun. 23, 2016

XML

Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Nature of Operations and Basis of Presentation

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Attune RTD, Inc. (the “Company”) was incorporated in Nevada on December 2001 as Catalyst Set Corporation and was dormant until July 14, 2007. On September 7, 2007, the Company changed its name to Interfacing Technologies, Inc. On March 24, 2008, the Company changed its name to Attune RTD, Inc., which it believes more accurately reflects its current business operations.

The Company was formed in order to provide developed technology related to the operations of energy efficient electronic systems such as swimming pool pumps, sprinkler controllers and heating and air conditioning controllers, among others.

The Company is presented as in the development stage from July 14, 2007 (Inception of Development Stage) through December 31, 2013. To date, the Company’s business activities during development stage have been corporate formation, raising capital and the development and patenting of its products with the hopes of entering the commercial marketplace in the near future.

We are a development stage company. We have generated no significant revenues to date. our auditors have raised substantial doubt as to our ability to continue as a going concern.

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 as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include the estimates of depreciable lives and valuation of property and equipment, allowances for losses on loans receivable, valuation of deferred patent costs, valuation of equity based instruments issued for other than cash, valuation of officers’ contributed services, and the valuation allowance on deferred tax assets.

The Company recognizes expenses in the same period in which they are incurred. The Company recognizes revenue in the same period in which they are incurred from its business activities when goods are transferred or services rendered. The Company’s revenue generating process consists of the sale of its proprietary technology or the rendering of professional services consisting of consultation and engineering relating types of activity within the industry. The Company’s current billing process consists of generating invoices for the sale of its merchandise or the rendering of professional services. Typically, invoices are accepted by vendor and payment is made against the invoice within 60 days upon receipt.

Cash and Cash Equivalents

CASH AND CASH EQUIVALENTS

For the purposes of the statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at December 31, 2013 or 2012, respectively.

Property and Equipment

PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service. The Company generally uses the following depreciable lives for its major classifications of property and equipment:

Depreciation	Useful Lives
Vehicles	5 Years
Computers	5 Years
Equipment	5 Years

Concentration of Credit Risk

CONCENTRATION OF CREDIT RISK

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash. The Company’s cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. The risk is managed by maintaining all deposits in high quality financial institutions. The Company had $0 of cash balances in excess of federally insured limits at December 31, 2013 and 2012.

Revenue Recognition

REVENUE RECOGNITION

The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, the fees are fixed or determinable, no significant Company obligations remain, and collection of the related receivable is reasonably assured.

The Company recognizes revenue in the same period in which they are incurred from its business activities when goods are transferred or services rendered. The Company’s revenue generating process consists of the sale of its proprietary technology or the rendering of professional services consisting of consultation and engineering relating types of activity within the industry. The Company’s current billing process consists of generating invoices for the sale of its merchandise or the rendering of professional services. Typically, invoices are accepted by vendor and payment is made against the invoice within 60 days upon receipt.

Revenues for the year ended December 31, 2013 were concentrated solely from one customer. The Company anticipates that its revenues in the future will come from both retail consumers and resellers.

Deferred Patent Costs and Trademark

DEFERRED PATENT COSTS AND TRADEMARK

Patent costs are stated at cost (inclusive of perfection costs) and will be reclassified to intangible assets and amortized on a straight-line basis over the estimated future periods to be benefited (typically, twenty years) if and once the patent has been granted by the United States Patent and Trademark office (“USPTO”). The Company will write-off any currently capitalized costs for patents not granted by the USPTO. Currently, the Company has one patent, U.S. Patent No. 7,777,366 B2, which was awarded by the USPTO on August 17, 2010.

On December 16, 2008, the Company filed its service mark, BrioWave, in standard characters with the USPTO. The service mark was first used in commerce on August 8, 2008 and filed for opposition by the USPTO on January 5, 2010. Trademark costs are capitalized on the Company’s balance sheet during the period such costs are incurred. The trademark is determined to have an indefinite useful life and is not amortized until such useful life is determined no longer indefinite. The trademark is reviewed for impairment annually. As of December 31, 2013, the Company fully impaired all patents and trademarks cost of $62,632 due to uncertainty regarding funding of future costs.

Impairment of Long-Lived Assets

IMPAIRMENT OF LONG-LIVED ASSETS

The Company accounts for long-lived assets in accordance with “Accounting for the Impairment or Disposal of Long-Lived Assets” (ASC 360-10). This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

In December 2011, the Company assessed its patents and trademarks and based on uncertainty of future funding and commercialization, the Company recognized a loss on all of its trademark and patents in the amount of $62,633, the carrying value at the time of impairment.

In December 2012, the Company assessed its software and based on uncertainty of future funding and commercialization, the Company recognized a loss on its software in the amount of $74,269, the carrying value at the time of impairment. 

Software License

SOFTWARE LICENSE

The Company capitalized its purchase of a software license in March 2013. The license is being amortized over 60 months following the straight-line method and is included in “Other Assets” on the Company’s balance sheet in accordance to ASC 350. During the year ended December 31, 2013, the Company recorded $19,545 of amortization expense related to the license. The terms and conditions of the license arrangement that it has in place with its vendor, IBI, for the software is based on a sixty month buyout agreement for a perpetual license, which is payable in equal consecutive monthly installments of $5,650. The monthly payment includes interest, the respective portion of a one-time software license fee of $142,669 and associated maintenance fees. This agreement grants the Company the non-exclusive, non-transferable right to use the specified software in object code form only, on the Company’s designated servers. The fees and the installment payments may not be cancelled. If installments are not made when due, and the default continues for 30 days after notice, the remaining unpaid balance of the one-time license fee shall be immediately due and payable. The Company may prepay the balance of remaining installments at any time, with an appropriate credit, as determined by IBI, for the future portion of the interest. Maintenance will be provided for the balance of the designated period. The vendor may transfer and assign the Company’s payment obligation hereunder. As of December 31, 2013, the Company is in default under the terms and conditions of the license agreement. The Company has been in contact with IBI over the non-payment situation and as of the date of this filing, the vendor has not prevented access to the software and continues to bill the Company for its respective monthly payments. Due to insignificant revenue and possible termination of contract, the Company has recognized impairment of $74,269 related to the software license as of December 31, 2012. The asset is fully impaired.

Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS

The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Note), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale.

Research and Development

RESEARCH AND DEVELOPMENT

In accordance generally accepted accounting principles (ASC 730-10), expenditures for research and development of the Company’s products are expensed when incurred, and are included in operating expenses.

Advertising

ADVERTISING

The Company conducts advertising for the promotion of its products and services. In accordance with generally accepted accounting principles (ASC 720-35), advertising costs are charged to operations when incurred, and such amounts aggregated $750 and $36,700 for the years ended December 31, 2013 and 2012, respectively.

Stock-Based Compensation

STOCK-BASED COMPENSATION

Compensation expense associated with the granting of stock based awards to employees and directors and non-employees is recognized in accordance with generally accepted accounting principles (ASC 718-20) which requires companies to estimate and recognize the fair value of stock-based awards to employees and directors. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.

Income Taxes

INCOME TAXES

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

In July 2006, the FASB issued ASC 740, “Accounting for Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a return. ASC 740 provides guidance on the measurement, recognition, classification and disclosure of tax positions, along with accounting for the related interest and penalties. ASC 740 became effective as of January 1, 2007 and had no impact on the Company’s financial statements.

The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Fair Value of Financial Instruments

FAIR VALUE OF FINANCIAL INSTRUMENTS

On January 1, 2008, the Company adopted ASC No. 820-10 (ASC 820-10), Fair Value Measurements. ASC 820-10 relates to financial assets and financial liabilities.

ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions.

ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions, about market participant assumptions that are developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820-10 are described below:

● Level 1. Observable inputs such as quoted prices in active markets;

● Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

● Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2013, on a recurring basis:

Description	Level 1		Level 2		Level 3		Gains (Losses)
Derivative Liability	$	-	$	-	$	169,785	$	(21,240	)
Total	$	-	$	-	$	169,785	$	(21,240	)

The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2012, on a recurring basis:

Description	Level 1		Level 2		Level 3		Gains (Losses)
Derivative Liability	$	-	$	-	$	110,828	$	38,946
Total	$	-	$	-	$	110,828	$	38,946

Basic and Diluted Net Loss Per Common Share

BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of common stock equivalents such as stock options and convertible debt instruments. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As of December 31, 2013 and 2012, there were no potentially dilutive securities. As a result, the basic and diluted per share amounts for all periods presented are identical

New Accounting Pronouncements

NEW ACCOUNTING PRONOUNCEMENTS

In February 2013, Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

- Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income (but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period); and

- Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the FASB determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill . The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

XML

Derivative Liability (Details Narrative) (USD $)	12 Months Ended		78 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Aug. 31, 2009
Derivative liabilities	$ 169,785	$ 110,828	$ 169,785
Gain on fair value of derivative liabilities		38,946
Loss on fair value of derivative liabilities	(21,240)
Gain on fair value of warrants	21,240
Gain on market value of convertible notes	13,056
Loss of due on issuance of warrants	(30,116)
Debt instrument initial conversion price	$ 0.02		$ 0.02	$ 0.15
Penalty expense on defaulting	1,500	43,000	5,800
Excess of convertible note discount	(4,180)		(4,180)
Gain fair value of convertible notes	38,946	38,946	38,946
Note balances	93,000		93,000
Percentage of increase of alternative financing interest rate, minimum	2.00%
Percentage of increase of alternative financing interest rate, maximum	10.00%
Note 1 [Member]
Debt instrument, face amount	93,000		93,000
Debt instrument initial conversion price	$ 0.58		$ 0.58
Debt convertible notes effective rate	40.27%		40.27%
Percentage of penalty and accrued interest obligated to pay	50.00%		50.00%
Note balances	19,166		19,166
Increase of default convertible notes effective interest rate	10.00%
Percentage of Increase of default convertible notes effective interest rate, minimum	5.00%
Percentage of Increase of default convertible notes effective interest rate, maximum	50.00%
Percentage of increase of alternative financing interest rate, minimum	2.00%
Percentage of increase of alternative financing interest rate, maximum	10.00%
Note 2 [Member]
Debt instrument, face amount	93,000		93,000
Debt instrument initial conversion price	$ 0.58		$ 0.58
Debt convertible notes effective rate	46.46%		46.46%
Percentage of penalty and accrued interest obligated to pay	50.00%		50.00%
Note balances	66,234		66,234
Increase of default convertible notes effective interest rate	10.00%
Percentage of Increase of default convertible notes effective interest rate, minimum	5.00%
Percentage of Increase of default convertible notes effective interest rate, maximum	50.00%
Percentage of increase of alternative financing interest rate, minimum	2.00%
Percentage of increase of alternative financing interest rate, maximum	10.00%
Note 3 [Member]
Debt instrument, face amount	3,000		3,000
Debt instrument initial conversion price	$ 0.50		$ 0.50
Debt convertible notes effective rate	34.71%		34.71%
Penalty expense on defaulting	1,500
Increase of default convertible notes effective interest rate	10.00%
Percentage of Increase of default convertible notes effective interest rate, minimum	5.00%
Percentage of Increase of default convertible notes effective interest rate, maximum	50.00%
Percentage of increase of alternative financing interest rate, minimum	2.00%
Percentage of increase of alternative financing interest rate, maximum	10.00%
Note 4 [Member]
Debt instrument, face amount	50,000		50,000
Debt instrument initial conversion price	$ 0.50		$ 0.50
Debt convertible notes effective rate	34.71%		34.71%
Increase of default convertible notes effective interest rate	10.00%
Percentage of Increase of default convertible notes effective interest rate, minimum	5.00%
Percentage of Increase of default convertible notes effective interest rate, maximum	50.00%
Percentage of increase of alternative financing interest rate, minimum	2.00%
Percentage of increase of alternative financing interest rate, maximum	10.00%
Note 5 [Member]
Debt instrument, face amount	22,500		22,500
Debt instrument initial conversion price	$ 0.45		$ 0.45
Debt convertible notes effective rate	31.24%		31.24%
Increase of default convertible notes effective interest rate	10.00%
Percentage of Increase of default convertible notes effective interest rate, minimum	5.00%
Percentage of Increase of default convertible notes effective interest rate, maximum	50.00%
Percentage of increase of alternative financing interest rate, minimum	2.00%
Percentage of increase of alternative financing interest rate, maximum	10.00%
Note 6 [Member]
Debt instrument, face amount	0		0
Increase of default convertible notes effective interest rate	10.00%
Percentage of Increase of default convertible notes effective interest rate, minimum	5.00%
Percentage of Increase of default convertible notes effective interest rate, maximum	50.00%
Percentage of increase of alternative financing interest rate, minimum	2.00%
Percentage of increase of alternative financing interest rate, maximum	10.00%
Note 7 [Member]
Debt instrument, face amount	$ 10,000		$ 10,000
Debt instrument initial conversion price	$ 0.35		$ 0.35
Debt convertible notes effective rate	24.30%		24.30%
Increase of default convertible notes effective interest rate	10.00%
Percentage of Increase of default convertible notes effective interest rate, minimum	5.00%
Percentage of Increase of default convertible notes effective interest rate, maximum	50.00%
Percentage of increase of alternative financing interest rate, minimum	2.00%
Percentage of increase of alternative financing interest rate, maximum	10.00%

XML

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following:

	Est. Useful Lives		December 31, 2013	December 31, 2012
Computer equipment	5 Years	$	-		10,227
Office equipment	5 Years		-		5,606
Vehicles	5 Years		-		114,190
			-		130,023
Less total accumulated depreciation			-		(51,526	)
		$	-		78,497

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Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies

1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Attune RTD, Inc. (the “Company”) was incorporated in Nevada on December 2001 as Catalyst Set Corporation and was dormant until July 14, 2007. On September 7, 2007, the Company changed its name to Interfacing Technologies, Inc. On March 24, 2008, the Company changed its name to Attune RTD, Inc., which it believes more accurately reflects its current business operations.

The Company was formed in order to provide developed technology related to the operations of energy efficient electronic systems such as swimming pool pumps, sprinkler controllers and heating and air conditioning controllers, among others.

The Company is presented as in the development stage from July 14, 2007 (Inception of Development Stage) through December 31, 2013. To date, the Company’s business activities during development stage have been corporate formation, raising capital and the development and patenting of its products with the hopes of entering the commercial marketplace in the near future.

We are a development stage company. We have generated no significant revenues to date. our auditors have raised substantial doubt as to our ability to continue as a going concern.

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 as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include the estimates of depreciable lives and valuation of property and equipment, allowances for losses on loans receivable, valuation of deferred patent costs, valuation of equity based instruments issued for other than cash, valuation of officers’ contributed services, and the valuation allowance on deferred tax assets.

The Company recognizes expenses in the same period in which they are incurred. The Company recognizes revenue in the same period in which they are incurred from its business activities when goods are transferred or services rendered. The Company’s revenue generating process consists of the sale of its proprietary technology or the rendering of professional services consisting of consultation and engineering relating types of activity within the industry. The Company’s current billing process consists of generating invoices for the sale of its merchandise or the rendering of professional services. Typically, invoices are accepted by vendor and payment is made against the invoice within 60 days upon receipt.

CASH AND CASH EQUIVALENTS

For the purposes of the statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at December 31, 2013 or 2012, respectively.

PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service. The Company generally uses the following depreciable lives for its major classifications of property and equipment:

Depreciation	Useful Lives
Vehicles	5 Years
Computers	5 Years
Equipment	5 Years

CONCENTRATION OF CREDIT RISK

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash. The Company’s cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. The risk is managed by maintaining all deposits in high quality financial institutions. The Company had $0 of cash balances in excess of federally insured limits at December 31, 2013 and 2012.

REVENUE RECOGNITION

The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, the fees are fixed or determinable, no significant Company obligations remain, and collection of the related receivable is reasonably assured.

The Company recognizes revenue in the same period in which they are incurred from its business activities when goods are transferred or services rendered. The Company’s revenue generating process consists of the sale of its proprietary technology or the rendering of professional services consisting of consultation and engineering relating types of activity within the industry. The Company’s current billing process consists of generating invoices for the sale of its merchandise or the rendering of professional services. Typically, invoices are accepted by vendor and payment is made against the invoice within 60 days upon receipt.

Revenues for the year ended December 31, 2013 were concentrated solely from one customer. The Company anticipates that its revenues in the future will come from both retail consumers and resellers.

DEFERRED PATENT COSTS AND TRADEMARK

Patent costs are stated at cost (inclusive of perfection costs) and will be reclassified to intangible assets and amortized on a straight-line basis over the estimated future periods to be benefited (typically, twenty years) if and once the patent has been granted by the United States Patent and Trademark office (“USPTO”). The Company will write-off any currently capitalized costs for patents not granted by the USPTO. Currently, the Company has one patent, U.S. Patent No. 7,777,366 B2, which was awarded by the USPTO on August 17, 2010.

On December 16, 2008, the Company filed its service mark, BrioWave, in standard characters with the USPTO. The service mark was first used in commerce on August 8, 2008 and filed for opposition by the USPTO on January 5, 2010. Trademark costs are capitalized on the Company’s balance sheet during the period such costs are incurred. The trademark is determined to have an indefinite useful life and is not amortized until such useful life is determined no longer indefinite. The trademark is reviewed for impairment annually. As of December 31, 2013, the Company fully impaired all patents and trademarks cost of $62,634 due to uncertainty regarding funding of future costs.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company accounts for long-lived assets in accordance with “Accounting for the Impairment or Disposal of Long-Lived Assets” (ASC 360-10). This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

In December 2011, the Company assessed its patents and trademarks and based on uncertainty of future funding and commercialization, the Company recognized a loss on all of its trademark and patents in the amount of $62,634, the carrying value at the time of impairment.

In December 2012, the Company assessed its software and based on uncertainty of future funding and commercialization, the Company recognized a loss on its software in the amount of $74,269, the carrying value at the time of impairment. 

SOFTWARE LICENSE

The Company capitalized its purchase of a software license in March 2013. The license is being amortized over 60 months following the straight-line method and is included in “Other Assets” on the Company’s balance sheet in accordance to ASC 350. During the year ended December 31, 2013, the Company recorded $19,545 of amortization expense related to the license. The terms and conditions of the license arrangement that it has in place with its vendor, IBI, for the software is based on a sixty month buyout agreement for a perpetual license, which is payable in equal consecutive monthly installments of $5,650. The monthly payment includes interest, the respective portion of a one-time software license fee of $142,669 and associated maintenance fees. This agreement grants the Company the non-exclusive, non-transferable right to use the specified software in object code form only, on the Company’s designated servers. The fees and the installment payments may not be cancelled. If installments are not made when due, and the default continues for 30 days after notice, the remaining unpaid balance of the one-time license fee shall be immediately due and payable. The Company may prepay the balance of remaining installments at any time, with an appropriate credit, as determined by IBI, for the future portion of the interest. Maintenance will be provided for the balance of the designated period. The vendor may transfer and assign the Company’s payment obligation hereunder. As of December 31, 2013, the Company is in default under the terms and conditions of the license agreement. The Company has been in contact with IBI over the non-payment situation and as of the date of this filing, the vendor has not prevented access to the software and continues to bill the Company for its respective monthly payments. Due to insignificant revenue and possible termination of contract, the Company has recognized impairment of $74,269 related to the software license as of December 31, 2012. The asset is fully impaired.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Note), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale.

RESEARCH AND DEVELOPMENT

In accordance generally accepted accounting principles (ASC 730-10), expenditures for research and development of the Company’s products are expensed when incurred, and are included in operating expenses.

ADVERTISING

The Company conducts advertising for the promotion of its products and services. In accordance with generally accepted accounting principles (ASC 720-35), advertising costs are charged to operations when incurred, and such amounts aggregated $750 and $36,700 for the years ended December 31, 2013 and 2012, respectively.

STOCK-BASED COMPENSATION

Compensation expense associated with the granting of stock based awards to employees and directors and non-employees is recognized in accordance with generally accepted accounting principles (ASC 718-20) which requires companies to estimate and recognize the fair value of stock-based awards to employees and directors. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.

INCOME TAXES

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

In July 2006, the FASB issued ASC 740, “Accounting for Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a return. ASC 740 provides guidance on the measurement, recognition, classification and disclosure of tax positions, along with accounting for the related interest and penalties. ASC 740 became effective as of January 1, 2007 and had no impact on the Company’s financial statements.

The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

FAIR VALUE OF FINANCIAL INSTRUMENTS

On January 1, 2008, the Company adopted ASC No. 820-10 (ASC 820-10), Fair Value Measurements. ASC 820-10 relates to financial assets and financial liabilities.

ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions.

ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions, about market participant assumptions that are developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820-10 are described below:

● Level 1. Observable inputs such as quoted prices in active markets;

● Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

● Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2013, on a recurring basis:

Description	Level 1		Level 2		Level 3		Gains (Losses)
Derivative Liability	$	-	$	-	$	169,785	$	(21,240	)
Total	$	-	$	-	$	169,785	$	(21,240	)

The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2012, on a recurring basis:

Description	Level 1		Level 2		Level 3		Gains (Losses)
Derivative Liability	$	-	$	-	$	110,828	$	38,946
Total	$	-	$	-	$	110,828	$	38,946

BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of common stock equivalents such as stock options and convertible debt instruments. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As of December 31, 2013 and 2012, there were no potentially dilutive securities. As a result, the basic and diluted per share amounts for all periods presented are identical

NEW ACCOUNTING PRONOUNCEMENTS

In February 2013, Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

- Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income (but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period); and

- Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the FASB determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill . The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

XML

Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Discount on Convertible Notes Payable	$ 16,898	$ 2,696
Class B Participating Cumulative Preferred stock, par value	$ 0.0166	$ 0.0166
Class B Participating Cumulative Preferred stock, shares authorized	1,000,000	1,000,000
Class B Participating Cumulative Preferred stock, shares issued	1,000,000	1,000,000
Class B Participating Cumulative Preferred stock, shares outstanding	1,000,000	1,000,000
Class A Common stock, par value	$ 0.00004897	$ 0.00004897
Class A Common stock, shares authorized	20,000,000,000	20,000,000,000
Class A Common stock, shares issued	43,312,429	32,126,727
Class A Common stock, shares outstanding	43,312,429	32,126,727

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. COMMITMENTS AND CONTINGENCIES

Employment Agreements

On March 26, 2008, the Company entered into certain employment arrangements with Shawn Davis, its Chief Executive Officer, and Thomas Bianco, its Chief Financial Officer. These arrangements established a respective annual salary of $120,000 for Messrs. Davis and Bianco. Because Messrs. Davis and Bianco have been, and are currently, employed by the Company in critical managerial positions, the Company believes it to be in the best interests of the Company to provide Messrs. Davis and Bianco with certain severance protections and accelerated option vesting in certain circumstances. Effective December 3, 2012, the Company entered into four-year term employment agreements and severance agreements with Messrs. Davis and Bianco. The terms of the employment agreements are substantially similar and establish an annual base salary of $185,000 for each of Messrs. Davis and Bianco, and also provide for certain employee benefits when the Company is financially able to provide for such benefits, or as determined by the Board of Directors.

The terms of the severance agreements are substantially similar and provide for aggregated severance amounts equal to 300% of Messrs. Davis and Bianco’s annual base salary in effect as of the date of the executive’s respective date of termination (the “Severance Amount”). In addition to the Severance Amount, the Company agreed to provide Messrs. Davis and Bianco with full medical, dental, and vision benefits from the date of termination through the third full year following the respective date of termination. The Company also agreed Messrs. Davis and Bianco shall each have one year from the respective date of termination in which to exercise all options that are vested as of the date of termination, subject to any trading window requirements or other restrictions imposed under the Company’s insider trading policy. The severance agreements state that if during the period of time during which Mr. Davis or Mr. Bianco is employed by the Company, a “change of control,” as defined in the severance agreement, occurs, 100% of the unvested portion of all options held by Messrs. Davis and Bianco as of the date of such “change of control” event shall be deemed vested and the executive shall be entitled to exercise such options.

The Company also agreed that if the payments are deemed “golden parachute” payments under the Internal Revenue Code of 1984 and either of Messrs. Davis and Bianco is obligated to pay an excise tax, the Company will reimburse Messrs. Davis and Bianco in full for both the amount of the excise tax, or ordinary income taxes owed in connection with the payment.

As of December 31, 2013, the Company had not paid Messrs. Davis and Bianco their respective new annual salaries of $185,000 and accordingly, the Company owed Messrs. Davis and Bianco accrued and deferred compensation in the amounts of $220,701 and $220,755, respectively.

Amendment to the Amended and Restated Articles of Incorporation

On March 4, 2013, stockholders voted in favor to amend the Company’s Amended and Restated Articles of Incorporation to (a) increase the number of authorized shares of common stock from fifty nine million (59,000,000) shares of common stock to twenty billion (20,000,000,000) shares of common stock; (b) amend the par value of Common Stock from a par value $0.0166 per share to a par value of $0.00004897 per share; (c) amend the Class B Preferred Stock such that the voting rights of Class B shareholders are increased from one hundred votes per share to twenty thousand votes per share; and (d) authorize the issuance of five million (5,000,000) shares of “blank check” preferred stock, 0.0166 par value per share, to be issued in series, and all properties of such preferred stock to be determined by the Company’s Board of Directors. The amendment became effective on July 10, 2013.

Operating Leases

On September 30, 2013, the lease on the Company’s office space located at 3700 E. Tahquitz Drive, Suite 117, Palm Springs, California expired. The Company’s corporate headquarters, including its principal administrative, marketing, technical support, and research and development departments, are presently located in Palm Springs, California, in office and warehouse provided by the Coachella Valley Economic Partnerships (CVEP) iHub division at no cost to the Company. The Company has been assigned one office, consisting of approximately 1,000 squre feet, which has space suitable for assembling and storage of its technology. Due to inactivity, the Company has agreed to move out of its office space at the accelerator campus with the CVEP iHub division. On April 3, 2014 the Company moved out of this space. The Company is in the process of locating suitable office space for its current operations.

Rent expense for the years ended December 31, 2013 and 2012 were $0 and $11,600, respectively.

Legal Matters

Dispute with Vendor

In March 2010, the Company engaged the services of a vendor to complete certain services. Pursuant to the agreement, the Company paid the vendor a total of $70,618 towards the completion of services. The agreement contained a “not to exceed cost” of $89,435. On or about September 21, 2010, the Company issued the vendor 250,000 shares of the Company’s restricted Class A common stock as an incentive for the vendor to deliver services no later than March 1, 2011. The vendor agreed to incrementally deliver work in progress; however, no work was received from the vendor. The vendor requested an additional payment of $18,818, which the Company did not pay. On or about October 4, 2010, the vendor repudiated the agreement. On February 23, 2011, the Company engaged the services of legal counsel and made written demand for the return of the stock certificate and attempted to initiate settlement negotiations. The vendor did not acknowledge receipt of the Company’s demand.

On September 25, 2011, the Company received notice of a Chapter 7 bankruptcy case filed personally by the vendor. The Company has placed a stop order on the certificate it issued on or about September 21, 2010 to the vendor. As of this date hereof, the Company is currently conferring with counsel regarding possible litigation to cancel the stock certificate. The Company’s alleged damages resulting from the vendor’s failure to perform and subsequent repudiation of the contract, including the Company’s lost opportunity costs, should it pursue litigation against the vendor, will need to be established by an economic expert. The vendor could conceivably pursue litigation against the Company for the $18,818 payment; however, the Company believes it is not probable and therefore, a contingent liability for the amount is not warranted.

Dispute with Wakabayashi Fund, LLC

On or about July 30, 2013, Wakabayashi Fund, LLC sent an email advertisement to the Company advertising certain financial services, and the Company responded to request further information. In subsequent telephone conversations, Mr. Stone of Wakabayashi Fund, LLC (the “Fund”) stated that he was a finance professional that previously held a high position in a well-known securities firm and regularly provides services for the purpose of funding public companies, and/or finding good companies for his clients to invest in. After several weeks, and during two telephone conversations with the Company’s executive officers, Mr. Stone stated that several of his close colleagues with whom he had a pre-existing relationship had reviewed the Company’s corporate information, agreed to invest immediately in the Company, and were imminently prepared to send checks to the Company, but that he would not advise them to do so until after the Company issued and delivered a stock certificate for 750,000 shares of the Company’s common stock to the Fund. After Mr. Stone assured the Company’s executive officers that the investment was assured, imminent and forthcoming, and that the Company would be receiving the first of many investment checks from accredited investors within a certain time period after the Fund received the stock certificate, the Company agreed to process the now pending stock certificate. The Company negotiated the size of the stock certificate based on the amount of money Mr. Stone claimed the Fund would deliver in the time period and based on promises he allegedly secured from pre-existing relationships, amounting to an aggregate of $100,000 - $200,000 in funds that he stated would begin arriving at the Company within the first few weeks. The Company indicated an urgent need for capital and believed Mr. Stone would fulfill the promise that was bargained for. As of the date of this report, no funds or offers to provide funds for the Company have been forthcoming from any person claiming any relationship with the Fund or Mr. Stone. The Company believes Mr. Stone’s statements were false and made to induce management into delivering the stock certificate. On May 17, 2013, the Company was notified by its transfer agent that the Fund was attempting to clear a stock certificate. The Company notified its transfer agent to place a stop order on the transaction. On or about July 2, 2013, the Company received an email from its transfer agent with a letter from the Fund’s counsel. On or about July 10, 2013, the Company responded to the Fund’s counsel detailing the facts set forth above and indicated the Company would not process the certificate for 750,000 shares of the Company’s common stock, but in an effort to resolve this matter quickly and efficiently, the Company offered to issue the Fund 50,000 shares of common stock. On September 24, 2013, the Company received a letter from its transfer agent’s counsel in regards to a civil complaint filed by the Fund, naming the Company’s transfer agent as a defendant, requesting issuance of the stock certificate for 750,000 unrestricted shares of the Company’s common stock. The Company has not been named in the suit, but it is prepared to litigate the matter if necessary. As of December 31, 2013 the 750,000 shares remains issued and outstanding.

Default on Convertible Promissory Note

On January 30, 2013, the holder of Convertible Notes presented a demand for immediate payment, as provided in the terms of the notes, of an aggregate of $120,000, representing 150% of the remaining outstanding principal balance of Convertible Notes 1, 2, and 3, together with default interest under the terms of the Notes. Because the Company has failed to pay the remaining principal balance, together with accrued and unpaid interest, upon the maturity dates of Convertible Notes 1, 2, 3, 4 and 5 (collectively, the “Convertible Notes”), the Company is in default under the respective Convertible Notes. The Convertible Notes are held by the same holder. As of the date of this filing, the Company continues to work with the holder of the Convertible Notes. The Company anticipates the parties will be able to resolve the issue amicably. The holder of the Convertible Notes has continued to support the Company and has advanced certain additional funds to the Company beyond the date of the issuance of its demand letter. The holder of the notes could pursue litigation, however, as of the date of this filing has not threatened to do so.

Default of Agreement with vendor for Software

As of December 31, 2013, the Company remains in default under the terms and conditions of an agreement with a software vendor. The vendor has not previously prevented access to the software and continues to bill the Company for its respective monthly payments. The Company is not currently using the software. Due to insignificant revenue and lack of future contract, the Company recognized full impairment of $74,269 related to the software license as of the balance sheet date of December 31, 2012

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Mar. 31, 2014	Jun. 30, 2013
Document And Entity Information
Entity Registrant Name	Attune RTD
Entity Central Index Key	0001477776
Document Type	10-K
Document Period End Date	Dec. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filer	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 3,678,870
Entity Common Stock, Shares Outstanding		43,312,429
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2013

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Related Party Transactions

12 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions

12. RELATED PARTY TRANSACTIONS

On July 23, 2012, Timothy Smith loaned the Company $10,000. The note was unsecured, bearing no interest and payable in cash or equity on or before October 7, 2013. On June 7, 2013, both parties agreed to convert the outstanding debt obligation into restricted common stock shares.

The Company entered into a stock grant agreement with its then Chief Technology Officer, Huiyou Zhu, on December 10, 2011 and agreed to compensate Mr. Zhu in stock for his services. Mr. Zhu has not be an active officer of the Company since April 2012. As of October 1, 2013, the stock grant agreement has been placed on hold until such time as when the Company has the required capital to resume development on the server and wireless code at which point in time it will again reengage Mr. Zhu’s services and payment for services under the stock grant agreement.

During the period, the Company received $29,436 advances from a related party. The advances are non-interest bearing with no stated maturity. In the event of a default, all payments made by the related party will be converted into the Company’s common stock at a conversion price of $0.13 per share. As of December 31, 2013, the Company is not in default.

On June 8, 2013, the Company released and discharged two Ford F150 vehicles, and all claims of ownership along with the entire remaining debt obligations owed on each vehicle to each of Messrs. Davis and Bianco. Both vehicles were purchased personally by and registered to each of Messrs. Davis and Bianco for business use in a pilot program the Company participated in with a major utility provider. The Company began making payments of $755.70 beginning on June 6, 2011 for the vehicle purchased by Mr. Davis and ended making payments on December 2012. The Company began making payments of $755.70 beginning on June 6, 2011 for the vehicle purchased by Mr. Bianco and ended making payments on December 2012. During the period ended, December 31, 2013, the Company wrote of $70,764 of debt related to balance owed on the two trucks. In association with the truck, the net book value of $65,949 was simultaneously written off. The difference of $4,815 was recorded as additional paid-in capital due to related party relationship.

During the period ended December 31, 2013, Mr. Davis and Bianco each forgave $20,000 worth of their salary; the transaction was recorded as additional paid-in capital. As of December 31, 2013, there is a salary payable of $401,511.

During the period ended December 31, 2013, Mr. Davis and Bianco each received 3,000,000 shares of the Company Class A common stock for services performed. The shares were valued based on the closing price of the fair market value on the date of authorization resulting in a total value of $600,000 which is recorded as compensation expense.

During the same period ended December 31, 2013, Mr. Davis and Bianco contributed $4,647 to the Company to pay off expenses. Repayment is not expect and recorded as additional paid-in capital.

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Statements of Operations (USD $)	12 Months Ended		78 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013
Income Statement [Abstract]
Revenues	$ 950	$ 1,877	$ 50,577
Operating Expenses
General and Administrative Expense	847,966	546,273	4,146,251
Change in Fair Value-Derivative	21,240	(38,946)	69,410
Impairment of Patent and Trademarks			62,634
Loss on Software Impairment		74,269	74,269
Payroll Expense	393,398	297,864	1,680,401
Total Operating Expenses	1,262,604	879,460	6,032,965
Loss from Operations	(1,261,654)	(877,583)	(5,982,388)
Other Income (expense)
Gain on Asset Theft, net			29,125
Interest Expense	(98,942)	(75,862)	(180,939)
Interest Income			15,999
(Loss) Gain on Debt Conversion			(122,252)
Total Other Income (expense)	(98,942)	(75,862)	(258,067)
Net Loss	(1,360,596)	(953,445)	(6,240,455)
Preferred stock dividends	(20,250)	(20,250)	(130,987)
Net Loss applicable to common stock	$ (1,380,846)	$ (973,695)	$ (6,371,442)
Net Loss per common share applicable to common stock:
Basic and diluted	$ (0.03)	$ (0.03)
Weighted average number of common shares outstanding:
Basic and diluted	39,951,230	30,583,453

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Convertible Note

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Convertible Note

6. CONVERTIBLE NOTE

Convertible Note 1. On September 2011, the Company issued a convertible promissory note in the amount of $42,500 to an investor (the “Convertible Note 1”). Convertible Note 1 had a maturity date of July 2012 and an annual interest rate of 8% per annum. The holder of Convertible Note 1 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. The convertible note has a variable conversion price of 58% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded convertible note as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $34,430, as of December 31, 2012, the discount was fully amortized. On May 2012, the Company issued 137,931 shares of Class A Common Stock to holder of the convertible note for conversion of $8,000 principal. During the period ended December 31, 2012, the Company was assessed a penalty of $17,250 due to default. On March 2013, the Company issued 591,133 shares of Class A Common Stock to the holder for the conversion of $12,000 principal of the convertible note. On July 2013, the Company issued 862,069 shares of the Class A Common Stock to the holder of the convertible note for the conversion of $15,000 principal of the convertible note. On October 2013, the Company issued 2,000,000 shares of Class A Common Stock to the holder of convertible note for the conversion of $7,600 principal of the convertible note. Due to conversion in accordance with the conversion terms; therefore, no gain of loss was recognized. As of December 31, 2013, the Company has a remaining principal balance due of $17,150 and accrued interest of $2,823.

Convertible Note 2. On January 5, 2012, the Company issued a second convertible promissory note in the amount of $42,500 to the same investor (the “Convertible Note 2”). Convertible Note 2 had a maturity date of July 2012 and an annual interest rate of 8% per annum. The holder of Convertible Note 2 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 2 has a conversion price of 58% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded Convertible Note 2 as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $31,748, as of December 31, 2012, the discount was fully amortized. As of December 31, 2012, the Company is in default and was assessed a penalty of $21,250. As of December 31, 2013, the Company has a remaining principal balance due of $63,750 and accrued interest of $5,280.

Convertible Note 3. On December 3, 2012, the Company issued a third convertible promissory note in the amount of $3,000 to the same investor (the “Convertible Note 3”). Convertible Note 3 had a maturity date of September 5, 2013 and an annual interest rate of 8% per annum. The holder of Convertible Note 3 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 3 has a conversion price of 58% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. The holder of Convertible Note 3 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 3 has a conversion price of 58% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded Convertible Note 3 as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $3,000, as of December 31, 2013, the discount was fully amortized. As of December 31, 2013, the Company is in default with the repayment term and was assessed a penalty of $1,500. As of December 31, 2013, the Company has a remaining principal balance due of $4,500 and accrued interest of $266.

Convertible Note 4. On February 21, 2013, the Company issued a fourth convertible promissory note in the amount of $50,000 to the same investor (the “Convertible Note 4”). Convertible Note 4 had a maturity date of November 25, 2013 and an annual interest rate of 8% per annum. The holder of Convertible Note 4 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 4 has a conversion price of 50% representing a discount rate of 50% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded Convertible Note 4 as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $38,864, as of December 31, 2013, the discount was fully amortized. As of December 31, 2013, the Company has a remaining principal balance due of $50,000 and accrued interest of $3,430.

Convertible Note 5. On April 18, 2013, the Company issued a fifth convertible promissory note in the amount of $22,500 to the same investor (the “Convertible Note 5”). Convertible Note 5 had a maturity date of January 22, 2014 and an annual interest rate of 8% per annum. The holder of Convertible Note 5 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 5 has a variable conversion price of 45% representing a discount rate of 55% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded Convertible Note 5 as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $21,824, as of December 31, 2013, the discount of 12,546 was amortized. As of December 31, 2013, the Company has a remaining principal balance due of $22,500 and accrued interest of $1,267.

Convertible Note 6. On August 5, 2013, the Company issued a sixth convertible promissory note in the amount of $10,000 to the same investor (the “Convertible Note 6”). Convertible Note 6 has a maturity date of May 7, 2014 and an annual interest rate of 8% per annum. The holder of Convertible Note 6 has the right to convert any outstanding principal and accrued interest into fully paid and non-assessable shares of Common Stock. Convertible Note 6 has a variable conversion price of 35% representing a discount rate of 65% of the average of the three lowest closing bid stock prices over the last ten days and contains no dilutive reset feature. Due to the indeterminable number of shares to be issued at conversion, the Company recorded Convertible Note 6 as a derivative liability (See Note 8). As a result of the derivative the Company recorded a debt discount of $10,000, as of December 31, 2013, the discount of $2,444 was amortized. As of December 31, 2013, the Company has a remaining principal balance due of $10,000 and accrued interest of $324

Convertible Note – related party. During the fiscal year 2013, the Company amended a $10,000 promissory note to a convertible promissory note with a related party. The note was amended to include a fixed conversion price of $0.02 per share. During the same period, the Company entered into another $10,000 Convertible Note with the same holder under the same term. Due to the embedded derivative as a result of the Convertible Notes 1 through 6, taints all convertible instrument and as such the notes are value apart of derivative liability (See note 8). As a result of the derivative the Company recorded a debt discount of $3,546, as of December 31, 2013, the discount was fully amortized. During the same period, both convertible notes were converted into 1,000,000 shares of Class A Common Stock. Due to conversion within the terms of the note, no gain or loss was recorded.

Default under Certain Notes. Because the Company has failed to pay the remaining principal balance, together with accrued and unpaid interest, upon the maturity dates of Convertible Notes 1, 2, and 3 (collectively, the “Convertible Notes”), the Company is now in default under the respective Convertible Notes. The Convertible Notes are held by the same holder. On January 30, 2013, the holder of Convertible Notes presented a demand for immediate payment, as provided in the terms of the notes, of an aggregate of $120,000, representing 150% of the remaining outstanding principal balance of Convertible Notes 1, 2, and 3, together with default interest under the terms of the Notes. As of the date of this filing, the Company continues to work with the holder of the Convertible Notes. The Company anticipates the parties will be able to resolve the issue amicably. The holder of the Convertible Notes has continued to support the Company and has advanced certain additional funds to the Company after the date of his initial demand letter. The excess of $1,500 owed in addition to the principal amount owed under Convertible Notes represents penalty on default and is recorded as a loss in the Company’s income statement. As of December 31, 2013 and 2012, total principal under default is $89,900 and $120,000, respectively.

Tainted Investor Warrants. The derivative feature of the Convertible Notes taints all existing convertible instruments, and specifically taints the 2,750,000 warrants issued on June 21, 2013 that will mature on June 23, 2016. As of December 31, 2013, the Company recognized a loss of tainting of warrants of $30,116 (see Note 7).

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Note Payable

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Note payable

5. NOTE PAYABLE

Secured Promissory Note 1. On June 21, 2013, The Company issued a Secured Promissory note in the amount $55,000 to an investor (the “Secured Promissory Note 1”). Secured Promissory Note 1 has a maturity date of June 23, 2014 and an annual interest rate of 12% per annum. Secured Promissory Note 1 is collateralized with the Company’s Energy Forecasting and Management Device”, Patent #7777366, including the associated source code. Under the terms and conditions of the agreement, a portion of the funds received from investor was used to satisfy a debt obligation owed to the Company’s patent filing attorney. As an incentive to induce investor, the Company issued a Warrant grant, giving the investor the right, but not the obligation, to purchase 1,375,000 shares of common stock at a fixed price of $0.04 per share, issued on June 21, 2013 and expiring at midnight on June 23, 2016. The warrants issued are tainted due to the derivative liability, see note 7.

Secured Promissory Note 2. On June 21, 2013, The Company issued a Secured Promissory note in the amount $55,000 to an investor (the “Secured Promissory Note 2”). Secured Promissory Note 2 has a maturity date of June 23, 2014 and an annual interest rate of 12% per annum. Secured Promissory Note 2 is collateralized with the Company’s Energy Forecasting and Management Device”, Patent #7777366, including the associated source code. Under the terms and conditions of the agreement, a portion of the funds received from investor was used to satisfy a debt obligation owed to the Company’s patent filing attorney. As an incentive to induce investor, the Company issued a Warrant grant, giving the investor the right, but not the obligation, to purchase 1, 375,000 shares of  common stock at a fixed price of $0.04 per share, issued on June 21, 2013 and expiring at midnight on June 23, 2016. The warrants issued are tainted due to the derivative liability, see note 7.

During the period, the Company received $29,436 advances from a related party. The advances are non-interest bearing with no stated maturity. In the event of a default, all payments made by the related party will be converted into the Company’s common stock at a conversion price of $0.13 per share. As of December 31, 2013, the Company is not in default.

On June 8, 2013, the Company released and discharged two Ford F150 vehicles, and all claims of ownership along with the entire remaining debt obligations owed on each vehicle to each of Messrs. Davis and Bianco. Both vehicles were purchased personally by and registered to each of Messrs. Davis and Bianco for business use in a pilot program the Company participated in with a major utility provider. The Company began making payments of $755.70 beginning on June 6, 2011 for the vehicle purchased by Mr. Davis and ended making payments on December 2012. The Company began making payments of $755.70 beginning on June 6, 2011 for the vehicle purchased by Mr. Bianco and ended making payments on December 2012. During the period ended, December 31, 2013, the Company wrote of $70,764 of debt related to balance owed on the two trucks. In association with the truck, the net book value of $65,949 was simultaneously written off. The difference of $4,815 was recorded as additional paid-in capital due to related party relationship.

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Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Schedule of Property And Equipment Useful Lives

The Company generally uses the following depreciable lives for its major classifications of property and equipment:

Depreciation	Useful Lives
Vehicles	5 Years
Computers	5 Years
Equipment	5 Years

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2013, on a recurring basis:

Description	Level 1		Level 2		Level 3		Gains (Losses)
Derivative Liability	$	-	$	-	$	169,785	$	(21,240	)
Total	$	-	$	-	$	169,785	$	(21,240	)

The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2012, on a recurring basis:

Description	Level 1		Level 2		Level 3		Gains (Losses)
Derivative Liability	$	-	$	-	$	110,828	$	38,946
Total	$	-	$	-	$	110,828	$	38,946

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Investment Offer

12 Months Ended

Dec. 31, 2013

Schedule of Investments [Abstract]

Investment Offer

13. INVESTMENT OFFER

On October 5, 2013, the Company offered an investment opportunity that paid participating investors up to a maximum of five times their initial investment. Under the terms and conditions of the offer, the investment was to be pooled and the return on investment paid to investors was based on the amount they invested and the size of the pool which was fixed at $159,560.00 Half of the proceeds received from the sale of the Company’s products would be consumed by the Company to cover expenses and the other half used to distribute a royalty payment to investors based on their percentage. Three investors participated in the offer and the total amount invested was $22,000. Based on the amounts invested, the Company is obligated to pay the three investors a royalty payment of 6.27%, 6.27%, and 1.25% of the remaining 50% of the proceeds not consumed by the Company, up to a maximum cumulative payout over time equal to five times their initial investment, at which point the investors will be considered to have been paid in full and the agreement terminates. The agreement does not specify when funds are to be distributed, or time duration. As of December 31, 2013, due to lack of revenue and the unlikelihood of future funding the $22,000 is presented on the balance sheet as a royalty payable. 

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Guarantee of Equity Value

12 Months Ended

Dec. 31, 2013

Guarantee Of Equity Value

Guarantee of Equity Value

9. GUARANTEE OF EQUITY VALUE

In March 2010, 120,000 shares of common stock were issued upon conversion of a $24,000 liability from a vendor. The shares were valued at $42,000 or $0.35 per share, based on a contemporaneous cash sales price and the Company recognized a loss on conversion of $18,000. The Company agreed with the vendor, prior to conversion, that it would guarantee the value of the stock, when sold by the vendor, up to the dollar value for the 2009 liability converted in 2010 of $24,000, plus an additional $11,000 for a total sales price of $35,000 when sold by the vendor. Any difference in value, if less than the liability, will be paid by the Company in cash or through the issuance of additional common stock. As a result, the Company recorded the $24,000 conversion as a liability along with the additional $11,000 guarantee for a total guarantee liability of $35,000. During 2011, the vendor forgave $25,000 of the payable where the Company recorded as gain on forgiveness of debt. A cash payment of $3,000 was also made in relation to the total payable outstanding.

The total cumulative liability to guarantee equity value totaled $90,980 as of December 31, 2013 and 2012. No shares have been sold by the vendor through December 31, 2013. 

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Derivative Liability

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Derivative Liability

7. DERIVATIVE LIABILITY

As discussed in Note 6 under Convertible Debentures, the Company issued convertible notes payable that provide for the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment is tainted and all additional convertible debentures and warrants are included in the value of the derivative. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded as derivative liabilities on the issuance date.

The fair values of the Company’s derivative liabilities were estimated at the issuance date and are revalued at each subsequent reporting date, using a lattice model. The Company recorded current derivative liabilities of $169,785 and $110,828 at December 31, 2013 and 2012, respectively. The change in fair value of the derivative liabilities resulted in a loss of ($21,240) and gain $38,946 for the period ended December 31, 2013 and 2012, respectively, which has been reported as other income (expense) in the statements of operations. The loss of $21,240 for the period ended December 31, 2013 consisted of a gain of $13,056 attributable to the fair value of attributable to the fair value of the convertible notes; an expense of ($30,116) attributable to the issuance of warrants that were tainted during the period; and a loss of ($4,180) attributable to value excess of the convertible note discount. The gain of $38,946 for the period ended December 31, 2012 consisted of a gain of $38,946 attributable to the fair value of attributable to the fair value of the convertible notes.

The following presents the derivative liability value at December 30, 2013 and 2012:

	December 31, 2013		December 31, 2012
Convertible Note - Related party	$	169,785	$	110,828
	$	169,785	$	110,828

The following is a summary of changes in the fair market value of the derivative liability during the period ended December 31, 2013 and 2012:

Balance, December 31, 2011	$	121,546
Increase in derivative due to issuance of convertible note		35,002
Change in fair market value of derivative liabilities due to the mark to market adjustment		(38,946	)
Decrease due to debt conversion		(6,774	)
Balance, December 31, 2012		110,828
Increase in derivative value due to issuance of convertible notes		78,388
Increase in derivative value due to tainting of warrants		30,116
Change in fair market value of derivative liabilities due to the mark to market adjustment		(13,056	)
Decrease due to debt conversion		(36,491	)
Balance, December 31, 2013	$	169,785

Key inputs and assumptions used to value the convertible debentures and warrants issued during the period ended December 31, 2013 and 2012:

- The Note #1 & #2 face amount as of 12/31/13 is $93,000 with an initial conversion price of 58% of the 3 lowest lows out of the 10 previous days (effective rate of 40.27%). Both notes are in default and obligated to pay the 50% penalty and accrued interest – we therefore assumed the note balances of $19,166 and $66,234 (total $93,000) and no additional interest is being accrued.

- The Note #3 face amount as of 12/31/13 is $3,000 (plus a default penalty assessment of $1,500) with an initial conversion price of 50% of the 3 lowest lows out of the 10 previous days (effective rate of 34.71%).

- The Note #4 face amount as of 12/31/13 is $50,000 with an initial conversion price of 50% of the lowest lows out of the 90 previous days (effective rate of 34.71%).

- The Note #5 face amount as of 12/31/13 is $22,500 with an initial conversion price of 45% of the lowest lows out of the 90 previous days (effective rate of 31.24%

- The Note #6 face amount as of 12/31/13 is $0 (converted 7/25/13).

- The Note #7 face amount as of 12/31/13 is $10,000 with an initial conversion price of 35% of the lowest lows out of the 120 previous days (effective rate of 24.30%).

- The projected volatility curve for each valuation period was based on the annual historical volatility of the company.

- For Notes #1 through #7 an event of default would occur 10% of the time, increasing 5.00% per quarter to a maximum of 50%.

- The Holder would redeem based on availability of alternative financing, increasing 2.0% monthly to a maximum of 10%; and

- The Holder would automatically convert the notes at maturity if the registration was effective and the company was not in default.

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Common Stock

12 Months Ended

Dec. 31, 2013

Stockholders' Equity Note [Abstract]

Common Stock

8. COMMON STOCK

Upon formation, the Company was authorized to issue 50,000 shares of common stock with no par value. On September 7, 2007, upon shareholder approval, the Company amended its Articles of Incorporation to increase the number of authorized common shares to 1,000,000. On that same date, the Company also effected a 280 for 1 forward stock split. All share and per share data in the accompanying financial statements has been retroactively adjusted to reflect the stock split.

On November 28, 2007, upon shareholder approval, the Company amended its Articles of Incorporation to establish two classes of stock. The first class of stock is Class A Common Stock, par value $0.0166, of which 59,000,000 shares were initially authorized, and the holders of the Class A Common Stock are entitled to one vote per share. The second class of stock is Class B Participating Cumulative Preferred Super-voting Stock, par value $0.0166, of which 1,000,000 shares are authorized. On March 4, 2013, stockholders voted to approve an amendment to the Company’s Amended and Restated Articles of Incorporation to (a) increase the number of authorized shares of Common Stock from fifty nine million (59,000,000) shares of Common Stock to twenty billion (20,000,000,000) shares of Common stock; (b) amend the par value of Common Stock from a par value $0.0166 per share to a par value of $0.00004897 per share; (c) amend the Class B Participating Cumulative Preferred Super-voting Stock such that the voting rights of Class B shareholders are increased from one hundred votes per share to twenty thousand votes per share; and (d) authorize the issuance of five million (5,000,000) shares of “blank check” preferred stock, $0.0166 par value per share, to be issued in series, and all properties of such preferred stock to be determined by the Company’s Board of Directors. The amendment became effective on July 10, 2013. All share and per share data in the accompanying financial statements has been retroactively adjusted to reflect the stock split.

The holders of the Class B Participating Cumulative Preferred Super-voting Stock are permitted to vote their shares cumulatively as one class with the Class A Common Stock. The Class B Participating Cumulative Preferred Super-voting Stock pays dividends at 6%. For the years ended December 31, 2013, 2012, 2011, 2010, 2009, 2008, and 2007, the Company’s Board of Directors did not declare any dividends. Total undeclared Class B Participating Cumulative Preferred Super-voting Stock dividends as of December 31, 2013, 2012, 2011, 2010, 2009, 2008, and 2007 were$130,987, $110,737, $90,487, $70,237, $49,987, $29,737, and $9,487, respectively.

Class A Common Stock

Issuances of the Company’s common stock during the years ended December 31, 2007, 2008, 2009, 2010, 2011, 2012 and 2013 included the following:

Shares Issued for Cash

During 2007, 224,000 shares of Class A common stock were issued for $36,000 cash with various prices per share ranging from $0.15 to $0.25. Additionally, the Company paid cash offering costs of $2,500.

During 2008, 2,352,803 shares of Class A common stock were issued for $360,250 cash with various prices per share ranging from $0.13 to $0.25. Additionally, the Company paid cash offering costs of $1,500.

In 2009, 3,688,438 shares of Class A common stock were issued for $437,435 cash with various prices per share ranging from $0.04 to $0.35. Additionally, the Company paid cash offering costs of $7,000.

In 2010, 2,138,610 shares of Class A common stock were issued for $442,181 cash with various prices per share ranging from $0.18 to $0.35.

In 2011, 6,349,750 shares of Class A common stock were issued for $1,318,750 cash with various prices per share ranging from $0.20 to $0.35.

In 2012, 1,530,000 shares of Class A common stock were issued for $153,000 cash with $0.10 price per share.

In 2013, 357,143 shares of Class A common stock were issued for $12,500 cash with $0.035 price per share. The shares were unissued as of December 31, 2013 and recorded as a stock payable.

Shares Issued for Services

In 2007, 14,000,000 vested shares of Class A common stock were issued to the Company’s founders, having a fair value of $232,400, based on a nominal value of $0.0166 per share. The $232,400 was expensed upon issuance as the shares were fully vested.

In 2007, 50,000 shares of Class A common stock were issued for legal services provided to the Company with a value of $7,500 or $0.15 per share, based on contemporaneous cash sales prices.

In 2008, 169,000 shares of Class A common stock were issued for services with a fair value of $34,530 ranging from $0.13 to $0.25 per share, based on contemporaneous cash sales prices.

In March 2009, 8,000 shares of Class A common stock were issued for services provided to the Company with a value of $2,400 or $0.30 per share, based on contemporaneous cash sales prices.

In June 2009, 17,333 shares of Class A common stock were issued for services provided to the Company with a value of $2,600 or $0.15 per share, based on contemporaneous cash sales prices.

In August 2009, 41,000 shares of Class A common stock were issued for services provided to the Company with a value of $6,150 or $0.15 per share, based on contemporaneous cash sales prices.

In February 2009, 500,000 shares of contingently returnable Class A common stock were issued to a consultant pursuant to an agreement whereby the consultant was required to establish a contract with a specific distributor and produce a sale of the Company’s product through such distribution channel. As of the date of this filing, no sales have occurred under the contract and the shares are not considered issued or outstanding for accounting purposes.

In January 2010, 21,000 shares of Class A common stock were issued for services provided to the Company with a value of $5,250 or $0.25 per share, based on market price on the date of grant.

In June 2010, 750,000 shares of Class A common stock were issued for services provided to the Company with a value of $270,200 at values ranging from $0.20 to $0.50 per share, based on market price on the date of grant.

In July 2010, 250,000 shares of Class A common stock were issued for services provided to the Company with a value of 37,500 or $0.15 per share, based on market price on the date of grant.

In December 2010, 55,000 shares of Class A common stock were issued to two vendors for services with a value of $28,050, based on based on market price on the date of grant.

In June 2011, 815,000 shares of Class A common stock were issued for services provided to the Company with a value of $220,050 at $0.27 per share, based on market price on the date of grant.

In August 2011, 50,000 shares of Class A common stock were issued for services provided to the Company with a value of $10,000 at $0.20 per share, based on market price on the date of grant.

In November 2011, 100,000 Shares of Class A common stock were issued for services provided to the Company with a value of $20,000 at $0.20 per share, based on market price on the date of grant.

In March 2012, 125,000 shares of Class A common stock were issued for services provided to the Company with a value of $12,500 at $0.10 per share, based on market price on the date of grant.

In June 2012, 125,000 shares of Class A common stock were issued for services provided to the Company with a value of $12,500 at $0.10 per share, based on market price on the date of grant.

In July 2012, 888,900 shares of Class A common stock were issued for services provided to the Company with a value of $88,890 at $0.10 per share, based on market price on the date of grant.

In September 2012, 275,000 shares of Class A common stock were issued for services provided to the Company with a value of $33,500 at $0.10 per share, based on market price on the date of grant

In October 2012, 360,000 shares of Class A common stock were authorized for services provided to the Company with a value of $36,000 at $0.10 per share, based on market price on the date of grant. As of December 31, 2013, the shares have not been issued and are recorded as stock payable.

In December 2012, 125,000 shares of Class A common stock were authorized for services provided to the Company with a value of $12,500 at $0.10 per share, based on market price on the date of grant. As of December 31, 2013, the shares have not been issued and are recorded as stock payable.

In January 2013, 6,000,000 shares of Class A common stock were issued to related parties for services provided to the Company with a value of $600,000 at $0.10 per share based on market price on the date of grant.

In February 2013, 72,500 shares of Class A common stock were issued for services provided to the Company with a value of $7,250 at $0.10 per share, based on market price on the date of grant.

In February 2013, 300,000 shares of Class A common stock were issued for services provided to the Company with a value of $30,000 at $0.10 per share, based on market price on the date of grant.

In March 2013, 360,000 shares of Class A common stock were issued for services provided to the Company with a value of $18,000 at $0.05 per share, based on market price on the date of grant.

Shares Issued in Conversion of Other Liabilities

During 2008, 100,000 shares of Class A common stock were issued upon conversion of a $35,000 liability to a vendor. The shares were valued at $0.15 per share or $15,000, based on a contemporaneous cash sales price and the Company recorded a $20,000 gain on conversion of debt.

In July 2009, 139,944 shares of Class A common stock were issued upon conversion of a $48,980 liability from a vendor. The shares were valued at $16,793 or $0.12 per share, based on a contemporaneous cash sales price. The Company agreed with the vendor, prior to conversion, that it would guarantee the value of the stock, when sold by the vendor, up to the dollar value for the 2009 liability converted (a total of $48,980) and the above mentioned 2008 conversion as it was the same vendor ($35,000) and any difference in value, if less than the liability, would be paid in cash by the Company. As a result, the Company recorded the $48,980 conversion as a liability along with the prior year conversion of $35,000 which resulted in an additional loss on conversion in 2009 of $35,000. The total cumulative liability to guarantee equity value from fiscal 2009 totaled $83,980 as relating to the above shares at December 31, 2009. These shares were actually issued in 2010; however the liability was recorded in 2009 based on this guarantee.

In August 2009, the Company converted $55,200 of loans due to a shareholder into 788,571 shares of common stock, which were valued at $118,286 or $0.15 per share, based on contemporaneous cash sales prices of the Company’s common stock. The Company recognized a loss on conversion of $62,637 and charged $449 to interest expense.

During 2010, 247,249 shares of Class A common stock were issued upon conversion of $39,272 of vendor liabilities. The shares were valued from $0.10 to $0.36 per share, based on a contemporaneous cash sales price and the Company recorded a $49,615 loss on conversion of debt

In 2010, the Company issued 900,000 warrants to several investors in the Company. These warrants are attached to issuances of common stock. 

On October 2011, the Company issued a convertible note which as a result taints all convertible instruments outstanding. As such the Company recorded a derivative liability of $40,498 for warrants outstanding (see Note 8).

On May 16, 2012, the Company issued 137,931 shares of Class A Common Stock to convert $8,000 of the convertible note into equity. The note was converted in accordance with the conversion terms; therefore, no gain of loss was recognized.

In March 2013, the Company issued 591,133 shares of Class A common stock as partial conversion of $12,000 of the principal of the noted dated September 28, 2011 as amended on October 17, 2011. Due to conversion within the terms of the note, no gain or loss was recognized.

In July 2013, the Company issued 862,069 shares of common stock to convert $15,000 of the convertible note dated October 2011 into equity (see Note 6). Due to conversion within the terms of the note, no gain or loss was recognized.

In July 2013, the Company issued 1,000,000 shares of Class A common stock to a related party to convert $20,000 of the convertible note dated June 2013 into equity (see Note 6). Due to conversion within the terms of the note, no gain or loss was recognized.

In July 2013, the Company issued 2,000,000 shares of Class A common stock to convert $7,600 of the convertible note dated in September 2011 into equity (see Note 6). Due to conversion within the terms of the note, no gain or loss was recognized.

2010 Equity Incentive Plan

In June 2010, the Company registered 4,000,000 shares of Class A Common Stock pursuant to its 2010 Equity Incentive Plan which was also enacted in June 2010. The Company’s Board of Directors have authorized the issuance of the Class A shares of common stock to employees upon effectiveness of an effective registration statement. The 2010 Equity Incentive Plan is intended to compensate employees for services rendered. The employees who will participate in the 2010 Equity Incentive Plan have agreed or will agree in the future to provide their expertise and advice to us for the purposes and consideration set forth in their written agreements pursuant to the 2010 Equity Incentive Plan. The services to be provided by the employees will not be rendered in connection with: (i) capital-raising transactions; (ii) direct or indirect promotion of Class A common stock; (iii) maintaining or stabilizing a market for the Class A common stock. The Board of Directors may at any time alter, suspend or terminate the 2010 Equity Incentive Plan.

As of December 31, 2013, 800,000 shares were approved under this plan for issuance by the Company’s Board of Directors, however, none of these shares have been granted or issued to date.

Class B Participating Cumulative Preferred Super-voting Stock

Issuances of the Company’s Preferred Stock during the years ended December 31, 2007, 2008 and 2009 included the following:

Shares Issued for Cash

In 2007, 133,333 shares of Class B Preferred Stock were issued for $45,000 cash or $0.3375 per share.

Shares Issued for Services

In 2007, 866,667 shares of Class B Preferred Stock were issued to the Company’s founders for services rendered during 2007 with a value of $0.3375 per share based on the above contemporaneous sale of Class B Preferred Stock.

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Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

10. INCOME TAXES

The Company accounts for income taxes under FASB ASC 740-10, which provides for an asset and liability approach of accounting for income taxes. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences, using currently enacted tax laws, attributed to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts calculated for income tax purposes.

For the years ended December 31, 2013 and 2012, respectively, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. The Company had approximately $598,399 and $637,429 of federal net operating losses at December 31, 2013 and 2012, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2030. 

	Year ended December 31,
	2013			2012
Deferred tax asset
NOL Carry forward	$	(598,399	)		(637,429	)
Net Deferred Tax assets before valuation allowance		954,812			745,373
Less: Valuation allowance		(954,812	)		(745,373	)
Net deferred tax assets	$	-		$	-

Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2013 and 2012, respectively.

A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:

	Year ended December 31,
	2013		2012
Federal and state statutory rate		35%		35%
Change in valuation allowance on deferred tax assets		(35%)		(35%	)

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions as of any date on or before December 31, 2013.

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Notes Payable (Details Narrative) (USD $)	12 Months Ended			78 Months Ended	19 Months Ended		0 Months Ended	1 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2010	Dec. 31, 2013	Dec. 31, 2012 Mr. Davis [Member]	Dec. 31, 2012 Mr. Bianco [Member]	Jun. 21, 2013 Warrants [Member]	Jun. 21, 2013 Secured Promissory Note 1 [Member]	Jun. 21, 2013 Secured Promissory Note 1 [Member] Warrants [Member]	Jun. 21, 2013 Secured Promissory Note 2 [Member]	Jun. 21, 2013 Secured Promissory Note 2 [Member] Warrants [Member]	Jun. 21, 2013 Secured Promissory Note 2 [Member] Warrants [Member]
Secured Promissory Note								$ 55,000		$ 55,000
Secured Promissory Note, maturity date								Jun. 23, 2014		Jun. 23, 2014
Secured Promissory Note, annual interest rate								1.20%		1.20%
Common stock, shares issued	43,312,429	32,126,727		43,312,429					1,375,000			1,375,000
Common stock, par value	$ 0.00004897	$ 0.00004897		$ 0.00004897					$ 0.04			$ 0.04
Warrant, expiration date			Apr. 15, 2013				Jun. 23, 2016		Jun. 23, 2016		Jun. 23, 2016
Advance from a related party	29,436	10,184		99,620
Common stock at a conversion price	$ 0.13
Contributed capital payments made for vehicles	6,590	15,808		31,936	756	756
Debt related to balance owed on the two trucks	70,764	70,764
Debt related to balance owned on net book value	$ 65,949	$ 65,949

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Subsequent Events

12 Months Ended

Dec. 31, 2013

Subsequent Events [Abstract]

Subsequent Events

15. SUBSEQUENT EVENTS

Change of Majority Control of the Company

On April 2, 2013, the Company entered into a “Letter of Intent” (the “LOI”) with Beacon Global Partners, LLC, a Wyoming limited liability company (“BGP”). Pursuant to the Agreement, BGP will assume majority control of the Company through the issuance of blank check stock giving them at least 51% voting control in exchange for ongoing financing, an amount to be determined. After due diligence, the Company, along with its Board of Directors, has determined that it is in the best interests of the Company and its shareholders to change majority control of the Company to BGP. After the transaction contemplated by the Agreement, BGP will hold at least 51% of the voting securities of the Company. As of the date hereof, BGP holds 0% of the voting securities of the Company.

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Schedule of Deferred Tax Assets

The net operating loss carry forwards, if not utilized, will begin to expire in 2030. 

	Year ended December 31,
	2013			2012
Deferred tax asset
NOL Carry forward	$	(598,399	)		(637,429	)
Net Deferred Tax assets before valuation allowance		954,812			745,373
Less: Valuation allowance		(954,812	)		(745,373	)
Net deferred tax assets	$	-		$	-

Schedule of Income Taxes Benefit Statutory Income Tax Rate

A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:

	Year ended December 31,
	2013		2012
Federal and state statutory rate		35%		35%
Change in valuation allowance on deferred tax assets		(35%)		(35%	)

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Income Taxes (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Net operating loss carryforwards	$ 598,399	$ 637,429
Net operating loss carryforwards, expiration		Dec. 31, 2030
Deferred tax assets valuation expense

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Statements of Changes in Stockholders' Equity (Deficit) (USD $)	Preferred Stock - Class B [Member]	Common Stock - Class A [Member]	Additional Paid-In Capital [Member]	Stock Payable [Member]	Development Stage [Member]	Total
Balance at Jul. 13, 2007						$ 0
Balance, shares at Jul. 13, 2007
Issuance of common stock for cash	2,213	11	78,776			81,000
Issuance of common stock for cash, shares	133,333	224,000
Offering costs			(2,500)			(2,500)
Issuance of stock for services	14,387	688	285,755			300,830
Issuance of stock for services, shares	866,667	14,050,000
Valuation of officer's contributed services			111,781			111,781
Net loss					(441,633)	(441,633)
Balance at Dec. 31, 2007	16,600	699	473,812		(441,633)	49,478
Balance, shares at Dec. 31, 2007	1,000,000	14,274,000
Issuance of common stock for cash		115	360,135			360,250
Issuance of common stock for cash, shares		2,352,803
Offering costs			(1,500)			(1,500)
Issuance of stock for services		8	34,522			34,530
Issuance of stock for services, shares		169,000
Issuance of stock for debt settlement		5	14,995			15,000
Issuance of stock for debt settlement, shares		100,000
Net loss					(422,612)	(422,612)
Balance at Dec. 31, 2008	16,600	827	881,964		(864,245)	35,146
Balance, shares at Dec. 31, 2008	1,000,000	16,895,803
Issuance of common stock for cash		181	437,254			437,435
Issuance of common stock for cash, shares		3,688,438
Offering costs			(7,000)			(7,000)
Issuance of stock for services		3	11,147			11,150
Issuance of stock for services, shares		66,333
Issuance of stock for debt settlement		39	118,247			118,286
Issuance of stock for debt settlement, shares		788,571
Net loss					(645,946)	(645,946)
Balance at Dec. 31, 2009	16,600	1,050	1,441,612		(1,510,191)	(50,929)
Balance, shares at Dec. 31, 2009	1,000,000	21,439,145
Issuance of common stock for cash		105	442,076			442,181
Issuance of common stock for cash, shares		2,138,610
Issuance of stock for services		53	340,952			341,005
Issuance of stock for services, shares		1,076,000
Issuance of stock for debt settlement		12	96,945			96,957
Issuance of stock for debt settlement, shares		247,249
Redemption of Stock by Officers for Loan Repayment		(26)	(175,799)			(175,825)
Redemption of Stock by Officers for Loan Repayment, shares		(521,439)
Stock issued to Shareholder		7	(7)			0
Stock issued to Shareholder, shares		139,944
Net loss					(1,036,938)	(1,036,938)
Balance at Dec. 31, 2010	16,600	1,201	2,145,779		(2,547,129)	(383,549)
Balance, shares at Dec. 31, 2010	1,000,000	24,519,509
Issuance of common stock for cash		311	1,318,439			1,318,750
Issuance of common stock for cash, shares		6,349,750
Issuance of stock for services		47	250,003			250,050
Issuance of stock for services, shares		965,000
Stock Redeemed		(1)	(4,998)			(4,999)
Stock Redeemed, shares		(29,988)
Stock rescinded from prior investment		(135)	135			0
Stock rescinded from prior investment, shares		(2,759,375)
Net loss					(1,379,285)	(1,379,285)
Balance at Dec. 31, 2011	16,600	1,422	3,709,359		(3,926,414)	(199,033)
Balance, shares at Dec. 31, 2011	1,000,000	29,044,896
Issuance of common stock for cash		75	152,925			153,000
Issuance of common stock for cash, shares		1,530,000
Issuance of stock for services		69	152,321	48,500		200,890
Issuance of stock for services, shares		1,413,900
Note Payable Conversion		7	7,993			8,000
Note Payable Conversion, shares		137,931
Settlement of Derivative due to Conversion			6,773			6,773
Contributed Capital
Net loss					(953,445)	(953,445)
Balance at Dec. 31, 2012	16,600	1,573	4,029,371	48,500	(4,879,859)	(783,815)
Balance, shares at Dec. 31, 2012	1,000,000	32,126,727
Issuance of common stock for cash				12,500		12,500
Issuance of stock for services		330	672,920	(23,500)		649,750
Issuance of stock for services, shares		6,732,500
Redemption of Stock by Officers for Loan Repayment
Note Payable Conversion		218	54,382			54,600
Note Payable Conversion, shares		4,453,202
Settlement of Derivative due to Conversion			36,491			36,491
Disposal of truck – related party			4,815			4,815
Forgiveness of salary			40,000			40,000
Contributed Capital			4,647
Net loss					(1,360,596)	(1,360,596)
Balance at Dec. 31, 2013	$ 16,600	$ 2,121	$ 4,842,626	$ 37,500	$ (6,240,452)	$ (1,341,608)
Balance, shares at Dec. 31, 2013	1,000,000	43,312,429

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Property and Equipment

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Property and Equipment

4. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	Est. Useful Lives		December 31, 2013	December 31, 2012
Computer equipment	5 Years	$	-		10,227
Office equipment	5 Years		-		5,606
Vehicles	5 Years		-		114,190
			-		130,023
Less total accumulated depreciation			-		(51,526	)
		$	-		78,497

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Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) (USD $)	12 Months Ended			78 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Accounting Policies [Abstract]
Cash equivalents	$ 0	$ 0		$ 0
Excess of federally insured limit	250,000			250,000
Maintain federally insured limit	0	0		0
Impairment of Patent and Trademarks			62,634	62,634
Impairment on software assets		74,269
Amortization expense related to license	19,545
Monthly installment amount payable for software license	5,650
One-time software license fee	142,669
Advertising costs	$ 750	$ 36,700

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Derivative Liability - Schedule of Changes in Fair Market Value of Derivative Liability (Details) (USD $)	12 Months Ended		78 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013
Fair Value Disclosures [Abstract]
Beginning balance	$ 110,828	$ 121,546
Increase in derivative value due to issuances of convertible notes	78,388	35,002
Increase in derivative value due to tainting of warrants	30,116
Change in fair market value of derivative liabilities due to the mark to market adjustment	(13,056)	(38,946)
Decrease due to debt conversion	(36,491)	(6,774)	(43,264)
Ending balance	$ 169,785	$ 110,828	$ 169,785

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Investment Agreement

12 Months Ended

Dec. 31, 2013

Investment Agreement

Investment Agreement

14.  INVESTMENT AGREEMENT

On June 26, 2013, the Company, entered into an investment agreement (the “Investment Agreement”) with Dutchess Opportunity Fund II, LP (“Dutchess”). Pursuant to the Investment Agreement, Dutchess committed to purchase up to $5,000,000 of the Company’s common stock over thirty-six months from the first day following the effectiveness of a registration statement, subject to certain conditions. 

As soon as the Company has an effective registration statement in place, the Company may draw on the facility from time to time, as and when it determines appropriate in accordance with the terms and conditions of the related investment agreement (“Investment Agreement”). The Company has not yet filed a registration statement registering the shares and therefore, it has not yet sold any shares under the Investment Agreement and it is currently in default under the Investment Agreement. The purchase price will be 95% of the lowest daily volume weighted average price (“VWAP”) of the Company’s common stock during the 5 consecutive trading day period beginning on the trading day immediately following the date of delivery of the applicable put notice. The amount that the Company is entitled to put in on any one notice shall be any amount up to the greater of 1) 200% of the average daily volume of the common stock for the 3 trading days prior to the applicable put notice date, multiplied by the average of the 3 daily closing prices immediately preceding the date of the put or 2) $100,000. Dutchess is not obligated to purchase shares if its total number of shares beneficially held at that time would exceed 4.99% of the number of shares of the Company’s outstanding common stock as determined in accordance with Rule 13d-1 of the Securities Exchange Act of 1934, as amended. In addition, the Company is not permitted to draw on the facility unless there is an effective registration statement to cover the resale of the shares, which it does not currently have in place.

Pursuant to the terms of a Registration Rights Agreement between the Company and Dutchess, the Company is obligated to file a registration statement with the SEC to register the resale by the Investor of shares of the common stock underlying the Investment Agreement and it has not yet done so.