The Company is not currently a party to any material pending legal proceedings, and there are no material legal proceedings to which any property of the company is subject.

The prior material legal proceeding that has now been concluded is the Settlement Agreement with Cornerstone Bank, entered into on or about May 7, 2012. The settlement with Cornerstone Bank was fully satisfied by the Company’s payment of $702,061 to Cornerstone Bank. Collateral held by Cornerstone in the form of 8,230,637 shares of Common Stock was returned to the Company. All obligations to Cornerstone have been satisfied.  As a result of writing off the liability due to Cornerstone totaling $2,341,106 and the building asset and the accumulated depreciation totaling $1,028,778, the Company has recognized a gain on settlement of debt of $1,312,328.