NOTE 11 – LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2014, the company believes that it will generate sufficient capital to satisfy working capital requirements for the next 12 months. We project that the Company will need approximately $1,000,000 in “additional working capital” to meet short term liquidity requirements. By the end of the first quarter 2015, we had purchase orders with seven major retail outlets in excess of $1.7 million with an expected gross margin of approximately $935,000. These sales are in addition to our direct response campaigns and website sales.

On February 20, 2015, the Company executed a Factoring and Security Agreement with LSQ Funding Group L.C. (“LSQ”) Pursuant to the terms of the agreement LSQ will purchase as absolute owner certain accounts receivable as agreed upon by both parties. LSQ will credit the company’s account the purchase price less applicable fees. As of March 31, 2015 LSQ has purchased $814,512 of the Company’s receivables. Of this the Company has received approximately $715,800.

In addition to the above revenue as of December 31, 2014, the Company converted $1,153,650 of principal and interest to common stock reducing notes payable to only $7,442. Also, the officers forgave all of their outstanding accrued salary of $189,320.

Based on revenue already realized in the first quarter of 2015, revenue projections beyond the 2015 first quarter and the debt that was eliminated in 2014 management believes that it will generate sufficient capital over the next year to fund its operations and has adequately relieved the Company of its going concern.