Item 1.01 Entry into a Material Definitive Agreement.

On December 28, 2012, the Company issued 6,835,900 shares of common stock (the “Common Stock”) and warrants (the “Warrants”) to purchase 5,649,500 shares of Common Stock to a certain investor, pursuant to a Common Stock and Warrant Purchase Agreement dated as of December 28, 2012 (the “Purchase Agreement”) for proceeds of $112,990 (the “Transaction”). NextLevel VIII, LLC (“NextLevel”), as the majority holder of the issued and outstanding shares of Series A Preferred Stock (“Preferred Stock”) and certain warrants (“2011 and 2012 Warrants”) acquired pursuant to that certain Cumulative Convertible Senior Note and Warrant Purchase Agreement dated as of October 24, 2011, and that certain Cumulative Convertible Senior Note and Warrant Purchase Agreement dated as of May 31, 2012, waived on behalf of itself and all holders of Preferred Stock and 2011 and 2012 Warrants, any and all right to the application of certain anti-dilution adjustments and rights of first refusal.  NextLevel also consented to the Transaction. This summary is not a complete description of all of the terms of the Purchase Agreement and is qualified in its entirety by reference to the Common Stock and Warrant Purchase Agreement filed as Exhibit 10.1 hereto and is incorporated by reference into this Item 1.01.

The Warrants are exercisable until December 28, 2017 at a price of $.04 per share (subject to certain adjustments) and entitle the holder to purchase 5,649,500 shares of Common Stock. This summary is not a complete description of all of the terms of the Warrants and is qualified in its entirety by reference to the Common Stock Purchase Warrant filed as Exhibit 10.2 hereto and is incorporated by reference into this Item 1.01.

Item 3.02 Unregistered Sales of Equity Securities

On December 28, 2012, the Company completed a private placement of Common Stock and Warrants for proceeds of $112,990. The offers and sales were made without registration under the Securities Act, or the securities laws of certain states, in reliance on the exemptions provided by Section 4(2) of the Securities Act and Regulation D under the Securities Act and in reliance on similar exemptions under applicable state laws. No general solicitation or general advertising was used in connection with the offering of the Common Stock and Warrants. The Company disclosed to the investors, and the investors acknowledged, that the Common Stock and Warrants and the underlying Common Stock could not be sold unless they are registered under the Securities Act or unless an exemption from registration is available, and the certificates or instruments representing the Common Stock and Warrants included, and the certificates representing the Common Stock to be issued upon conversion or exercise of the Warrants will include a legend to that effect.